A yr in the past, Meta was using excessive on the metaverse. The firm had simply accomplished its rebranding from Facebook to Meta. Social networks, as Mark Zuckerberg defined, have been now not a singular focus for the corporate. “From now on, we’re going to be metaverse-first, not Facebook first,” he mentioned.

Now, as Meta finishes its first full yr as a “metaverse company,” the outlook is significantly much less rosy. The firm has misplaced billions of {dollars} on Reality Labs, the division overseeing its metaverse work. Its inventory has cratered. The firm has, for the primary time, shed 1000’s of staff in mass layoffs. Even longtime shareholders are beginning to do what was as soon as unthinkable: query Zuckerberg’s imaginative and prescient for the long run.

At the identical time, Meta nonetheless hasn’t clearly articulated what the metaverse is or successfully made the case for why the billions of individuals at the moment utilizing its social media apps would wish to be a part of an “embodied internet.” Worse nonetheless, the corporate’s preliminary metaverse product has proved underwhelming, and turned the metaverse right into a punchline, reasonably than a supply of anticipation.

Meta and Zuckerberg have supplied numerous definitions during the last yr. The metaverse is the “successor to the mobile internet,” and “an embodied internet where you’re in the experience.” It’s digital actuality, but in addition (ultimately) augmented actuality. It will even, in some way, tie into our current social graphs on Facebook and Instagram. But, in contrast to Facebook and Instagram, it will likely be interoperable with different firms’ platforms. It might need one thing to do with NFTs and web3.

“The defining characteristic of the metaverse is that you really feel like you’re present with other people or in another place,” Zuckerberg mentioned throughout an interview at SXSW in February. “You might look at documents, you might look at a website but in the future you’re going to be in it.”

Zuckerberg would possibly assume that is explaining the beginnings of some grand imaginative and prescient for a future web, however it additionally simply sounds so much like plain outdated digital actuality. Moreover, it’s telling that considered one of his go-to examples is “looking at documents.” Over the final yr, the corporate has leaned onerous into Horizon Workrooms, its social VR expertise geared towards workplace staff.

When the corporate confirmed off its new high-end Quest Pro, it supplied up Horizon Workrooms as one of many key experiences optimized for the brand new headset. You can now recreate a complete digital workspace in VR. Soon, you’ll be capable to use a slew of workplace and productiveness software program, from Zoom to Microsoft Word.

But the concept of working in VR with a headset strapped to your face continues to be fairly removed from interesting to most individuals. And there are a vanishingly small variety of jobs and industries the place working in VR is even remotely justified.

Perhaps what’s most telling is that Meta has apparently struggled to influence its personal staff to make use of Workrooms. Despite making Quest 2 headsets free to all staff final yr, a current push from Zuckerberg for groups to start out holding conferences in VR revealed that many both hadn’t taken benefit of the supply or hadn’t set the headset up, The New York Times reported.

Without a transparent imaginative and prescient, it turned far too straightforward for Meta’s critics to grab on aesthetic points and different issues. For now, the closest factor Meta has to the “metaverse” is Horizon Worlds, its social VR playground the place customers are free to discover as their avatar. But the expertise of really utilizing it’s far completely different than the polished movies and demos Meta has shared.

This was by no means extra obvious than when Zuckerberg earnestly posted a screenshot of his avatar in entrance of the Eiffel Tower and Barcelona’s Sagrada Familia to mark Horizon World’s launch in France and Spain. The screenshot was hilariously dangerous and rapidly took on a lifetime of its personal as individuals mocked the “1995 level graphics.”

Zuckerberg rapidly promised new and improved avatars, and confirmed off a extra life like likeness of himself, saying that “graphics in Horizon are capable of much more.” (A post on LinkedIn, which has since been deleted, later revealed that the “improved” Zuck avatar took a few month and “40 iterations” to finish.)

Then, on the firm’s Connect occasion, Zuckerberg promised a fair greater development: legs. Soon, Horizon’s cartoonish, legless avatars would get replaced with ones resembling precise, strolling people. We watched as Zuckerberg’s “full body” avatar casually strolled round Horizon Worlds. But whereas it was first regarded as a turning level — including leg monitoring to VR has been a notoriously difficult drawback — it turned out this specific demo was extra stagecraft than precise innovation. The firm later confirmed that the demo was created with movement seize and wasn’t dwell VR.

Meta nonetheless says that its avatars will ultimately have legs, however it’s not clear when, or if the function will even seem like the demo.

It’s inconceivable to disregard that Zuckerberg’s metaverse pivot has additionally coincided with the corporate’s worst monetary efficiency in current reminiscence. Meta’s income has shrunk for 2 straight quarters for the primary time ever. Its inventory has misplaced greater than 60 p.c of its worth this yr, wiping out billions of {dollars}.

To be truthful, the metaverse isn’t totally accountable. Apple’s anti-tracking modifications in iOS have damage the corporate’s promoting enterprise. And your entire trade is reeling from an financial downturn that’s affected even the most important tech giants.

At the identical time, Meta is undeniably shedding huge quantities of cash on its metaverse investments. Reality Labs misplaced $10 billion in 2021, and 2022’s losses already amounted to $9 billion by the third quarter. Those losses are anticipated to “grow significantly” in 2023, based on the corporate’s CFO.

It’s no shock, then, that Meta’s traders are beginning to query whether or not all this metaverse stuff is de facto price it. The CEO of Altimeter Capital, a longtime Meta shareholder, made headlines when he wrote an open letter to Mark Zuckerberg earlier this yr that referred to as the corporate’s metaverse investments “super-sized and terrifying, even by Silicon Valley standards.”

In the corporate’s most up-to-date earnings name, the place Zuckerberg extra usually fields peppy questions concerning the firm’s advert enterprise, one analyst additionally raised the problem of “experimental bets versus proven bets.”

“I think everyone wants to hear why you think this pays off,” he requested. Zuckerberg, who appeared a bit flustered by the query, replied that “the metaverse work is a longer term set of efforts that we’re working on, but I think that it’s going to end up working.” Patience, he mentioned, will likely be rewarded.