Zuckerberg’s metaverse rush pauses for ‘quality lockdown’

In early September, Mark Zuckerberg rushed to a Meta lab in Pittsburgh, sat in front of more than 100 high-definition cameras, and prepared to prove the metaverse critics wrong.

The photo shoot was designed to create a more realistic avatar in the likeness of the Meta CEO as the social media giant strives to show that its $10 billion annual bet on a futuristic 3D digital world known as the metaverse was not a fiasco.

In previous weeks, the Facebook founder had been the subject of public ridicule after an earlier cartoon-like avatar selfie went viral for all the wrong reasons.

This primitive image was widely derided as “cynical” and “soulless,” and pressured Zuckerberg to prove that he had not wildly misjudged his company’s future based on a metaverse vision that has seen more than $27 billion in operating losses over the past three years. years.

But the selfie section is just one of the hurdles for Zuckerberg, who believes the metaverse is the next natural evolution of online socialization and is expected to reveal the new avatar as soon as next week.

According to his notes and conversations with 10 current and former employees, the social media empire with 3 billion users is experiencing setbacks and difficulties as part of the transition to Meta and has already had to delay future launches and adjust expectations.

In a September note seen by the Financial Times, Vishal Shah, vice president of Meta’s metaverse arm, warned that users and creators are complaining about Horizon Worlds – the social virtual reality experience and the closest thing to a metaverse ever. It was low quality and full of bugs.

He ordered a “quality restraint” for the remainder of the year and told staff they needed to improve the fundamentals before any aggressive expansion. Shah added that staff working on the product needed to “reprioritize or slow down some of the things we’re planning,” adding that he lowered his target for user numbers for the second half of the year.

Mark Zuckerberg has been mocked for his primal avatar selfie, which has been described as ‘lie’ and ‘soulless’ for the metaverse.

Some employees warned that morale had plummeted as teams were restructured to adapt to Zuckerberg’s new vision, which many had yet to embrace. “There are a lot of people in it who don’t wear it at all. [virtual reality] headphones,” said a metaverse employee.

Meta said in a statement that the company “confidents that the metaverse is the future of computing and should be built around humans.” “Of course we’re always making quality improvements and acting on feedback from our creator community. It’s a multi-year journey and we will continue to make what we’re building even better.”

to the metadata store

It’s been almost a year since Zuckerberg announced his Meta pivot. He said his plan is to eventually attract 1 billion users and “hundreds of billions of dollars a day in digital commerce,” which will take between five and 10 years.

From now on, Zuckerberg puts the social media network he founded in 2004 – and the vast majority of its $118 billion annual revenue today – into secondary status, saying “we’re going to be the metaverse, not Facebook first”. Reality Labs, the division dedicated to metadata, will see its workforce double to 20,000 engineers.

Meta currently has more than 83,000 staff members after rapidly expanding during the pandemic and snatched augmented and virtual reality engineering talent from rivals Microsoft and Apple as it sought to strengthen its metaverse team.

But the impetus to the metaverse comes as the group’s market cap has dropped from $1 trillion to less than $400 billion in the past 14 months. The company faces several challenges: a decline in digital ad revenue, slowing user growth on the Facebook platform, and increased competition from China-owned deep-pocketed rival TikTok.

Last week, Zuckerberg announced that hiring for most teams would be frozen and belt-tightened into 2023, given the tough macroeconomic backdrop. Employees were also ordered by Zuckerberg to work with “increased intensity” and “a sense of urgency,” according to a July memo.

Line chart of Meta share price ($) showing Facebook's bumpy journey into the metaverse

Analysts and employees said the coming years will determine whether the metaverse shift is the answer to these problems – new revenue lines to catch up with the next generation of internet users, or a giant distraction that sucks resources and limits the company’s ability to reinvigorate its legacy product. and rebuild the ad infrastructure.

“The challenge is that they’re metaverse-focused because they haven’t invested in the core product that is Facebook and Instagram. “This is all a side show from the fact that Meta continues to clear its clock by TikTok,” said LightShed Partners analyst Rich Greenfield.

He added that Meta’s level of investment in the metaverse is “concerning” for investors. “The metaverse, as meta predicts, cannot be invested today. Nobody buys Meta for the metaverse”.

big investments

Since early 2019, more than $27 billion in operating losses have been reported for Reality Labs, Meta’s metadatabase and virtual reality division.

According to people familiar with the situation, investments have focused on the development of software for the 3D world, as well as hardware such as virtual and augmented reality headsets that can be used to log into the metadatabase. system.

Along with avatars to represent users on Metaverse, the company is working on activities beyond simple socializing to give them something to do, from exercising in virtual fitness programs to playing games and even venues for training.

In its final results in July, the company said it has $24 billion worth of non-cancellable contractual commitments “primarily related to our investments in servers, network infrastructure and consumer hardware products at Reality Labs.”

Meanwhile, the division’s revenues, which come largely from VR headset sales, fall short, in part due to the fact that the entire VR industry is developing more slowly than expected. In the second quarter, Reality Labs generated $452 million of total revenue of $28 billion, and the company warned that it expects Reality Labs revenue to be even lower next quarter.

“It’s a big gamble,” said one advertising executive. “If you get the timeline wrong [too early] 10 years later, the company is really in danger given how capital intensive this is.”

According to many current and former staff members, the recent restructuring and abandonment of various projects to prioritize the metadata warehouse has lowered morale, and some report an unhelpful split between metadata-focused staff and those in the old part of the business.

Devon Copley, CEO of Avatour, a virtual meeting company, said Meta “leads the industry” when it comes to developing hardware.

He warned, however, that the company is having a harder time developing software for the metaverse.

“The problem is the fragmented nature of the different software product teams and initiatives within Meta org,” he said, referring to constant restructurings, “frequent changes of direction” and the lack of a “coherent vision” for a social network that includes virtual. and augmented reality.

Already, the company is struggling to impress creators who build social experiences on the metaverse. According to a Meta note shared by someone on their Facebook profile, the creators complained at a roundtable last month that Horizon Worlds was “unstable and unreliable” and that Meta staff didn’t report bugs or give them updates ahead of launch.

“Employees don’t communicate well, otherwise there may be a shortage of staff and things can get out of hand,” said one metaverse employee.

In Shah’s memo, first reported by The Verge, Meta executive said the Horizon Worlds team had deliberately sought “faster shipping”, but that this had resulted in employees “compromising quality for the sake of speed.”

The bugs and stability issues were so bad, Shah stated that even Meta’s own employees didn’t use the product.

“The simple truth is, if we don’t love it, how can we expect our users to like it?”

#Zuckerbergs #metaverse #rush #pauses #quality #lockdown

Leave a Reply

Your email address will not be published. Required fields are marked *