This is worth negative ten billion dollars. I would pay ten billion dollars to never use this again. I wanted to have hope that we could do this, and it would be fun, but I mean, you guys agree that this one of the most buggy software experiences, ever.
—Alex Heath, The Verge (transcribed audio excerpt from the video below)
I’m still percolating, alas, but I did want to share with my readers a couple of YouTube videos which caught my attention.
The first, a 15-minute editorial video by The Verge‘s Adi Robertson, discusses Meta’s new Quest Pro VR headset and its Horizon Worlds and Horizon Workrooms social VR experiences. She and her colleagues did not hold back in their criticisms of both, particularly the Horizon platforms (the quote at the top of this blogpost comes from another writer for The Verge, as a group was kicking the tires on Horizon Workrooms).
The Verge staff make it very clear that they are less than impressed with what is on offer from Meta, and that they do not believe that remote workteams will be using either the Quest Pro or Horizon Workrooms, over a Zoom call.
The popular virtual reality YouTuber ThrillSeeker goes even further in the following 15-minute video, which has already racked up over 400,000 views:
In it, he takes Mark Zuckerberg and his team at Meta to task for dropping the ball with their virtual reality hardware and software strategy to date:
How in the hell did it go so wrong that Meta and Horizon have become the laughingstock of hundreds of videos and publications, and that Quests, for the most part, are just sitting on shelves collecting dust?
Meta, I understand that you are a massive corporation…and that running a business like Facebook, WhatsApp, Instagram, and Oculus is probably incredibly difficult.
But you have somehow managed to turn one of the coolest things I have ever seen in my life, into one of the lamest jokes in tech.
Among many other criticisms, he accuses Meta (rightfully) of focusing on wireless VR headsets to the exclusion of high-end PCVR (that is, headsets like his and my beloved Valve Index, which require a good desktop computer with a powerful graphics card, and can run a lot of applications which wireless headsets would struggle with.
What I find so fascinating about both these videos is that they are emblematic of a rising tide of antipathy against Meta, as it tries to repivot to become a metaverse company, sinking tens of billions of dollars a year into a VR/AR strategy that might take a decade or longer before it goes truly mainstream (that is, beyond the early adopters and the hardcore gamers). Both videos mention the recent massive layoffs at Meta, a further sign that all is not well with the company as it struggles to find the next big thing after social networking.
Mark Zuckerberg is placing a very expensive bet on virtual and augmented reality and the metaverse, but will that big bet pay off, and when? Stay tuned.
So (like many of you), have been following the news media these past seven days, and between the U.S. midterm elections, the jaw-dropping layoffs at both Meta and Twitter, and the collapse of major cryptocurrency exchange FTX, it’s been quite a week!
UPDATE 3:08 p.m.: Sequoia has just removed Adam’s report from its website but, as always, the Internet Archive’s Wayback Machine has you covered! WARNING: I listened to all one-and-a-half hours of the audio version of this article, and I want that time back! The level of hubris and cringe in this article is off the charts!
Given what’s happened in the past 48 hours, this report has aged like milk—badly. I had bookmarked it yesterday, and when I went to revisit the page today, I noticed that it had been updated:
UPDATE: Nov 9, 2022:Since this article was published, a liquidity crunch has created solvency risk for FTX and its future is uncertain. Many have been affected by this unexpected turn of events. For Sequoia, our fiduciary responsibility is to our LPs. To that end, we shared this letter with them today regarding our investment in FTX. For FTX, we believe its fiduciary responsibility is first to its customers, and second to its shareholders. As such, FTX is exploring all opportunities to ensure its customers are able to recover their funds as quickly as possible.
First: The crypto crash is looking more and more like a sustained crypto nuclear winter.Blockchain is now tainted, perhaps irredeemably so, and blockchain-based metaverses are tainted by association. What this means is that the already-established, relatively stable platforms (Decentraland, Voxels, Somnium Space, and a handful of others) are going to have a very difficult time selling NFT-based land, avatar accessories, etc., as well as encouraging new users to come and set up shop. We’re rapidly reaching the point that the general, non-tech public will run the other way when crypto, blockchain, or NFTs are mentioned, given the unending litany of bad news.
People and companies who invested in these platforms at the height of the hype cycle may have to make some hard choices between holding on (perhaps forever) in hopes of seeing a profit, or being forced by circumstances to sell at a loss, because they desperately need to get out of the market. (Perhaps they worked at Meta or Twitter or some other company downsizing during this increasingly brutal recession?). In my opinion, this will keep prices for NFT properties at or near rock-bottom for the foreseeable future, and it will impact these metaverse firms and their future development plans.
But, as bad as that is, the news is even worse for those blockchain-based metaverse projects which have not yet launched. In my opinion, many of these projects are doomed to fail, taking their investors’ money along with it. Some were designed to be rugpulls from the very beginning, hoping to cash in on the ignorant, while others were just weirdly-hatched and poorly-executed but honest proposals (e.g. Cirque de Soleil’s Hanai World project, which I am told has now folded).
Second: Meta is wounded, having lost the public’s trust and investors’ confidence, and facing increasing blowback for its decision to heavily invest in the metaverse and virtual reality. Meta’s missteps are negatively affecting the general public’s impression of the “metaverse”.
Say the word “metaverse” to your average man (or woman) on the street and you probably would get one of the following two responses:
The “metaverse” is Meta/Facebook’s Horizon Worlds and Horizon Workrooms only; or
The “metaverse” consists of the blockchain/crypto/NFT-based platforms only, e.g. Decentraland, Voxels, Somnium Space, The Sandbox, etc.
I’ve already dealt with the blockchain-based metaverses above; now let’s turn to Meta. Mark Zuckerberg and his team at Meta have spent a fair deal of time and money to promote Meta’s visions of the “metaverse”. Mark doesn’t want you to spare a thought for the countless other metaverse platforms which have been in development for years, and in some cases like Second Life, decades. He wants you to focus on Meta. Meta, people! Pay no attention to those other people!!! (Yeah, I know; it’s going about as well as you can expect, given people’s lack of trust in Mark or his company.)
Things have not been going especially well for Meta at the moment, with numerous new media reporting on its financial turmoil, as Mark Zuckerberg invests billions of dollars into research and development to build his vision of the metaverse. Venture capitalist Nathan Benaich recently tweeted (please note that Meta Reality Labs is the R&D arm of Meta working on VR/AR/MR/XR projects.):
In fact, things have been going so badly for Meta lately that many metaverse pundits (myself included) have begun to worry that it is tainting the general public’s perception of the “metaverse”, perhaps unfairly so. Tony Vitillo (a.k.a. SkarredGhost), an Italian man whose blog, The Ghost Howls, covers the VR/AR/MR/XR industry and the metaverse, wrote a recent editorial which I think needs to be read. He echoes what I and other metaverse pundits have noticed for quite some time now: the general public’s mood on the metaverse has soured quickly.
After my usual Sunday tour of Twitter and LinkedIn feeds to gather news for my weekly newsletter, I feel the need of writing a rant about a trend I’m seeing online after the Meta Connect about Meta and its involvement in the “metaverse” field.
Many journalists of important tech magazines (TechCrunch, Business Insider, etc…) are all playing a common sport now: targeting Meta and Mark Zuckerberg. They are all writing posts about how Meta has failed, the metaverse has failed, the Meta Quest Pro failed, and also Zuck has failed. Everything is a huge failure. I admit that this news has caught me by surprise, because I have many projects in XR that are doing pretty well, and actually this has been one of the best moments to be in the ecosystem for me. I’m sorry that I hadn’t received the memo that everything failed: I’ll stop doing what I’m doing now and immediately go looking for a job to make fries at McDonald’s.
Meta shocked the financial world this Thursday by posting a 52% profit decline, its second straight quarterly decline, and a revenue decline of 4% year-over-year. This decimated their stock so badly with a 24.5% drop that it caused financial analyst Jim Cramer to break down crying and apologize on air for having faith in the company.
A main culprit of Meta’s decline is the thing it was named after, Mark Zuckerberg’s relentless pursuit of the metaverse through the company’s Reality Labs division, which has lost $9.4 billion this year so far, and there are warnings that bigger and broader losses are to come in 2023.
And, of course, the news yesterday that Meta was laying off over 11,000 employees has not helped matters in the slightest. It’s not yet known how these massive layoffs will affect Meta’s work in virtual reality, augmented reality, and the metaverse, but I wouldn’t be surprised if a few projects in that area are trimmed. Many in the financial community are attacking Mark Zuckerberg and his desire to repivot Meta to be a metaverse company, and the negative blowback will also impact other companies working in this space. I’ve written more about this on my blog in this August 2022 editorial, How the Crypto Crash—and Meta’s Missteps—Are Souring the General Public on the Metaverse, so rather than repeat myself, I will direct you there if you want to learn more of my thoughts on the matter. On to the next point!
Third: Elon Musk is killing Twitter, and its death throes, plus Meta’s continued struggles, will lead to many people radically rethinking their use of social media, and leaving Twitter, Facebook, and Instagram.
If you haven’t got the memo yet, surveillance capitalism and algorithmically-driven echo chambers/walled gardens are about as popular as crypto nowadays. Despite daily reassurances from the Chief Twit himself, the MIT Technology Review reports that Twitter may have already lost one million users, many of whom have moved to Mastodon and other federated services, beyond the control of capricious billionaires. And, while not in dire straits like Twitter, Meta’s social media platforms are similarly bleeding users, as the younger generations abandon Facebook and Instagram for TikTok (which, of course, has its own user data privacy and surveillance capitalism issues, not to mention a parent company now marketing a standalone VR headset to compete with Meta, but that is an issue for a different editorial).
How will this affect the metaverse? Well, for starters, it’s going to be a lotharder for metaverse-building companies to get attention using traditional social media during this time of turmoil and upheaval, which is their primary form of advertising. For example, Mastodon is notoriously resistant to influencer culture and corporate shilling, even going so far as to ban entire instances/servers to avoid being tainted by the filthy lucre of capitalism. (For example, the overly-protective but proactive moderator of the well-established scholar.social Mastodon instance/server just banned the new journa.host instance, because of problems the latter has had in setting up their server, which means that journalists who set up accounts on journa.host are barred from seeing what is going on over at the scholar.social server. These people, many of whom were burned by older forms of social media, are not playing around!)
Another example of the impact: I have unfollowed all the people I used to follow on Twitter, deleted almost all of my tweets, and deactivated my account, in direct reaction to the callous, heartless way that Elon Musk handled his layoffs, gutting half the Twitter staff (I wrote about it in an update at the end of my previous blogpost). This means that I deliberately cut off one venue by which I leaned about news and events taking place in the VR/AR/MR/XR and the metaverse. However, I am still a member of almost 100 different Discord servers, including the 715-member RyanSchultz.com Discord, and my connections there keep me just as well-informed, without having to take part in Facebook or Twitter! I am also quite active on Reddit, although lately most of that time has been spent lollygagging in r/Buttcoin! 😜
Finally, we are entering a severe global recession, with both mass layoffs (see above) and staffing shortages, combined with skyrocketing inflation, which means that we are going to continue to see chaos, disorder, and upheaval all around the world. The war in Ukraine is still upending global supply chains, and China’s continuing strict COVID lockdowns are still impacting product manufacturing. Oh, and did I mention that we need to act now to put the brakes on global climate change before many parts of the world become inhospitable and even uninhabitable? If you’re not depressed, then you haven’t been paying attention!*
Fasten your seatbelts, kids; I have a feeling it’s going to be a bumpy ride, and not just one bumpy night! While chaos can be liberating for some people, it is anxiety-inducing for many others (including myself). We are also still operating under an ongoing pandemic that is absolutely NOT over (for example, my best friend’s 92-year-old mother passed away from COVID-19 in hospital a couple of weeks ago). I am, still, barely leaving my apartment, and my university still has an indoor facemask mandate in place. (Good thing my passionate hobby is virtual reality and the metaverse! Avatars can’t catch the virus. 😉 )
In summary, this global chaos (plus all the other points I made above) will impact the people and companies building the metaverse, as well as the people using it! There will be new challenges, but also new opportunities. Expect the unexpected!
* If you are struggling with your mental health, at the start of the pandemic I pulled together a list of helpful resources, which you can find here. It’s a little out-of-date, but most of the links should still work. Remember, help is out there if you need it!
In an article published today in The Wall Street Journal, titled Company Documents Show Meta’s Flagship Metaverse Falling Short (archived version here), Jeff Horwitz, Salvador Rodriguez, and Meghan Bobrowsky report that Meta’s flagship social VR platform, Horizon Worlds, is falling short of the company’s own internal performance expectations. They write:
Meta initially set a goal of reaching 500,000 monthly active users for Horizon Worlds by the end of this year, but in recent weeks revised that figure to 280,000. The current tally is less than 200,000, the documents show.
Most visitors to Horizon generally don’t return to the app after the first month, and the user base has steadily declined since the spring, according to the documents, which include internal memos from employees.
By comparison, Meta’s social-media products, including Facebook, Instagram and WhatsApp, together attract more than 3.5 billion average monthly users—a figure equivalent to almost half the world’s population. Horizon is currently reaching less than the population of Sioux Falls, S.D.
In a survey of Horizon users, Meta researchers said users reported that they couldn’t find metaverse worlds they liked and couldn’t find other people to hang out with. Other complaints included that “people do not look real” and that the avatars don’t have legs.
The researchers noted that the survey included only 514 people because the available pool of users to survey is “small and precious.”
The number of Horizon users online at the same time, known as concurrency, trails far behind both the socially-focused upstart VRChat and Second Life, the pioneering cyberworld that was launched in 2003, said people familiar with the matter.
The WSJ report also states that only 9% of the worlds built by creators are ever visited by at least 50 people, and most created worlds are never visited at all. Also, men outnumber women in Horizon Worlds by two to one, a gender imbalance that can lead to women being harassed and feeling unsafe.
Among the persistent complaints from early adopters and testers, according to the documents, are that users have trouble adjusting to the technology, and that other users behave badly.
On a recent night, a female Journal reporter visited one of Horizon’s most popular virtual worlds, the Soapstone Comedy Club. It had about 20 users in it, all appearing as avatars. When the reporter introduced herself and tried to conduct an interview with a small group, one user replied: “You can report on me, baby.” The same user then asked her to expose herself.
One user who was flirting with a woman in the crowd was interrupted by what appeared to be his real-life girlfriend yelling obscenities at him in the background.
According to the documents, men outnumber women in Horizon by two to one. One safety feature Horizon has introduced is an option for users to create the equivalent of a 4-foot personal boundary for their avatars to deter unwanted physical contact.
Even worse, the WSJ article reports that “more than half of Quest headsets—the entry model costs about $400—aren’t in use six months after they are purchased, according to people familiar with the data.” This news greatly surprises me, because I would have assumed that, even if Horizon Worlds is not attracting and retaining users, at least consumers who bought the wireless virtual reality headset would be using it for games.
Last year, I avidly watched Mark Zuckerberg and other senior Facebook executives at the Facebook Connect 2021 event, as they proudly announced that the company would be rebranding as Meta, and pivoting to go all-in on the metaverse.
This year, I was too busy with my full-time job as a university librarian to watch the Meta Connect 2022 keynotes live, so instead, I read through the tech news media’s coverage of the event. And, to say the least, that coverage was mixed in its assessment of Meta’s new high-end wireless VR headset, the Meta Quest Pro.
Tony Vitillo (a.k.a. SkarredGhost), an Italian man whose blog, The Ghost Howls, covers the VR/AR/MR/XR industry and the metaverse, wrote:
Let’s be honest: Meta Connect was utterly disappointing.
The hardware to be launched at the event had already been totally leaked
We had no unexpected major VR game announced, nor news on GTA or Assassin’s Creed VR
Most pieces of news were already been announced or were not that relevant. Some of them, like the new avatars, were much worse than expected
It was a very lightweight talk about XR, social, the metaverse, and productivity, with almost no interest in giving important information. For instance, many writings were there for such a short time that I could not even take a screenshot: the price of the Quest Pro was on the screen for like 1 second and then disappeared. Some info was absolutely missing, like the specs of the Quest Pro were not specified during the launch. This was total nonsense.
Meta keeps saying VR is the future, but everything it shows us is an inferior rehash of the things we already have. Its event today was, between assurances that everything is great in the Metaverse, a collection of tacit admissions that the best they can hope to do is ape a reality we are all desperately trying to leave behind.
At Meta Connect 2022, the company’s annual developer conference for its VR efforts and Oculus hardware platform, the company announced a lot of stuff — but what it communicated more effectively than anything else was just how incredibly thirsty — one might even say desperate — Mark Zuckerberg is for his metaverse bet to pay off.
Meta just showed off its latest headset, the Meta Quest Pro. While it’s got real-time expression tracking and mixed reality, it’s also going to set you back $1,499. So who’s buying this tech that costs roughly the price of three current-gen consoles? The answer is…working professionals. Mark Zuckerberg wants to replace your dreary work computers with VR headsets…
VR headsets can be clunky, sweaty places, and many people get severe motion sickness in them. Nevertheless, Zuckerberg seems confident corporations will pay top dollar to entrap their workers in them. And maybe they will. VR is currently being used to train surgeons, analyze road scenarios for automobile companies, and design architecture. Maybe I wouldn’t hate myself if I had to write blogs while wearing a plastic headset. Ugh, okay. I can’t do this anymore. I would absolutely hate it. Corporate would have to take my MacBook from my cold dead hands.
All these advantages come with one big cost: the Meta Quest Pro’s battery life sounds very bad. I was told the headset would last between one and two hours on a single charge, then take around two hours to recharge, either on the dock or with a cable. (My demo was held at a series of separate stations with multiple Quest Pros, so I didn’t experience the limits firsthand.) That’s a little more than half the time you’d get with a Quest 2, which lasts two to three hours. The back-mounted battery isn’t easily removable like the Vive Focus 3’s, so you can’t just swap it out and keep going.
This narrows the Quest Pro’s flexibility as an enterprise device. HTC, Magic Leap, and other enterprise companies tend to emphasize how long their products will last — offering either comparatively long-lasting batteries or swappable ones.
I get using Quest for creative and scientific endeavors, such as designing shoes or looking at a virus from all possible angles, but putting on your headset to check your email or make a PowerPoint presentation? Somehow, that just doesn’t sound that exciting.
Avatar legs will be coming first to Meta’s Horizon social VR platform, though it’s unclear exactly when. They’ll be coming to “more and more experiences over time as we improve our technology stack,” Zuckerberg said. During the Connect event, they seemed to move quite naturally, though because it was a prerecorded video, we’re not sure yet how they’ll look in practice.
Meta isn’t just working on legs; it’s planning to add a whole bunch of new avatar-related features. The company is exploring how to make expressive and photorealistic avatars to represent yourself in different situations, for example. You’ll be able to bring avatars to Reels so they can be featured in your videos or to Messenger and WhatsApp for video chats. (They’re coming to Zoom, too.) And Meta is launching an avatar store in VR later this year so you can more easily shop for clothes and specific looks.
But Paul Tasso of Forbes was particularly scathing in his criticism, writing:
When your most significant announcement is the fact that after years and years of investment, you’re on the verge of debuting virtual characters with legs, something has gone wrong.
The entire problem with Mark Zuckerberg’s fascination with the metaverse is that he’s trying to force a sci-fi reality to happen long before the rest of the society wants or needs it to actually exist. His version of an AR/VR-based metaverse remains a niche, not something to focus a trillion dollar company around. And given the trillion dollar company in question, which has spent the last decade rendering Facebook and Instagram close to unusable, this company being trusted with this supposed key part of the future is not something anyone has a lot of faith in.
As they say on RuPaul’s Drag Race, NURSE! Third degree burns over here! (Paul’s not wrong, though.)
But, in addition to the rather underwhelmed response of the major tech news websites, there was something else I noticed. There’s been a shift in attitudes by the general (non-tech) public towards the concept of the metaverse, in the twelve months between Facebook Connect 2021 and Meta Connect 2022. The mood seems to have shifted among some people.
I’m not talking about those people, like me, the early adopters and VR fanatics who have been active and building in various metaverse platforms for years. And I’m not talking about the passionate adherents of the various virtual worlds like Second Life, who were likely around the last time the metaverse was a buzzword. (By the way, The Wall Street Journal’s four-part podcast about Second Life and what it means to today’s metaverse ambitions is one of the best things I’ve listened to in years, and should it be required listening for the employees of any metaverse company seeking to inherit SL’s mantle in the present day—including the beleaguered staff at Meta.)
I am talking about those people who possibly first heard about the metaverse in the splash of publicity which the October 2021 Mark Zuckerberg keynote address at Facebook Connect 2021 ignited. People like the CNBC news correspondent Sam Shepard. Please watch this short news segment where he tries to grasp the concepts; I found it quite illuminating:
In twelve short months, we’ve gone from the general public not really knowing much about the metaverse, to the general public not getting what all this fuss is about, like Sam Shepard.
Even worse, between the ongoing crypto winter and Meta’s many missteps this year, the public is starting to sour on the concept of a metaverse. Most still don’t know a lot about it, but when they see many of the projects to which the term “metaverse” has been attached (like the various now-struggling NFT metaverse projects, and Meta’s attempts to sell Horizon Worlds and Horizon Workrooms), they seem to be developing a distaste for the idea.
I’m sensing a rising tide of antipathy. Many non-technical people, like Sam Shepard, are either scratching their heads, or have already formed a negative opinion. (I’m seeing it arise in places like the cryptosnark community on Reddit, r/Buttcoin, where blockchain metaverse projects like Decentraland are being roundly critiqued, even mocked.)
Many economists are now predicting that 2023 will bring a severe global recession (exacerbated by the Russian invasion of Ukraine), and rising inflation sharply affecting the everyday cost of living. People have more important things to worry about—like putting food on the table and keeping a roof over their heads. They likely will have less disposable income to spend on gadgets like a US$1,500 virtual reality headset.
Last Christmas, the Meta Quest 2 was a hot seller. This year, Meta’s Quest Pro, at four times the price and with half the battery life of the Quest 2, will most certainly not be under very many Christmas trees. It’s just not that exciting a product and (at least until there’s a killer app for it), Meta will just keep trying to sell it to businesses and consumers who aren’t yet convinced that virtual reality—and the metaverse—are all that necessary or compelling in the first place.
Brace yourselves: the next few years might be nasty. And I predict that many projects and companies in this space are going to struggle to get attention, attract users, and gain traction. A few firms might decide to repivot (as Philip Rosedale’s High Fidelity has already done), to focus on areas where they can make money. Other companies will simply fold.
But those individuals and companies who can tell a story that ignites people’s imaginations, and come up with compelling use cases for virtual reality and the metaverse, might do very well. Savvy marketing and an unshakeable, clearly articulated vision will be key. Who knows, perhaps Mark Zuckerberg’s investments will pay off, in five or ten or twenty years. But it doesn’t look too terribly promising in the short term, does it?