In October 2021, Facebook CEO Mark Zuckerberg led the multitrillion-dollar social media company in a new direction. Facebook changed its name to Meta, and Zuckerberg set his sights on a new horizon: the Metaverse.
“At the time, Facebook as a company had a real need and desire to rebrand into a different brand,” said Leo Gebbie, principal analyst and director at CCS Insight. “Facebook as a company wanted to make it clear that it was more than just another social website.”
Although the term Metaverse is older than Facebook, Zuckerberg’s Metaverse ambitions have existed within Meta since 2014, when Facebook acquired virtual reality headset developer Oculus and launched Reality Labs. I was there. Seven years and a global pandemic later, the global video game industry has surpassed $193 billion in revenue. Meta and Wall Street saw an opportunity to ride the virtual reality headset wave and take advantage of the growing online population.
“In 2020 and into 2021, there was a bit of a sense that this was a technology that was ready and was finally going to be a big hit,” Gebbie said. “We have experienced many false dawns in virtual reality.”
In December 2021, Horizon Worlds launched in the US, marking Meta’s entry into the open-world virtual reality platform space. Meta had a short-term goal of reaching 500,000 monthly active users for Horizon Worlds by the end of the year. But its long-term goals were even more ambitious. In June 2022, Zuckerberg told CNBC’s Jim Cramer that he expected 1 billion users to make “hundreds of dollars in e-commerce transactions per person” by the end of this decade.
The company has a very long road ahead.
According to an insider report published by the Wall Street Journal in 2022, Horizon Worlds had only about 200,000 monthly active users less than a year after its launch. Now, three years later, the term metaverse has largely disappeared from public conversation, with Google Trends noting a sharp decline in searches for the term starting in 2022.
To make matters worse, Reality Labs is bleeding money, with operating losses of $58 billion since 2020.
Mehta did not respond to CNBC’s request for comment.
What happened to the Metaverse? What exactly is the Metaverse? And where is the Meta today? Watch the video to learn more.
Correction: An earlier version of this article incorrectly identified Meta’s Ray-Ban partnership glasses as augmented reality glasses. The glasses are smart glasses, not augmented reality.
—CNBC’s Jonathan Vanian contributed to this report.
