Remember when Meta was called Facebook, and eerie visions of VR Mark Zuckerberg didn’t haunt your dreams?

Meta’s big rebrand happened almost a year ago now, and a lot has happened since Zuckerberg made “metaverse” the go-to buzzword-slash-meme of 2022.

The company formerly known as Facebook not only started pouring billions of its own cash reserves into the metaverse, it jumpstarted an investment craze. Venture capital and private equity funding in metaverse-related companies leaped 823% from $13 billion in 2021 to over $120 billion in 2022, according to a report from McKinsey — and 2022 isn’t even over yet.

That investment spike is astonishing given nobody really seems to know what the metaverse is or whether it exists yet. To skeptics, those hundreds of billions of dollars represent a chorus of claps led by Zuckerberg, crypto bros, and Web 3.0 evangelists: “I do believe in the metaverse, I do! I do!”

This edition is all about the metaverse: so strap on your headset, make sure there’s nothing breakable in your immediate vicinity, and let’s dive in.

A Brief History Of The Metaverse

The word “metaverse” comes from the 1992 science-fiction dystopian novel Snow Crash. Broadly it refers to a future version of the internet that you engage with primarily through immersive technology rather than through a flat screen like your phone or PC.

Techies have been trying to make metaverse tech a reality for decades as well. In 2003, Second Life became the first metaverse-esque platform to go mainstream, with people creating virtual avatars that interacted in a digital world but spent real cash. Second Life is still going, and developer Linden Labs said in May the platform has an annual economy of $650 million in GDP.

Along Came Zuckerberg.

Facebook first dipped its toe into metaverse tech in 2014 when it acquired VR technology company Oculus for $2 billion. Although Zuckerberg did not utter the word “metaverse” at the time, he was already planning ahead.

“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow,” Zuckerberg said in a statement.

Shifting Facebook’s strategy to be more mobile than web-based has been one of Zuckerberg’s greatest coups as CEO. By 2014 the social network had also hoovered up Instagram and WhatsApp — the future looked bright.

Cut To 2021…

and Facebook was in the throes of its latest scandal. The Wall Street Journal had begun publishing documents leaked to them by former employee Frances Haugen in September. By early October, Haugen was testifying before Congress about how she believed the company put “profits over people.”

On October 28, after much media buildup, Facebook revealed it was changing its name to Meta and Zuckerberg said the company would be bifurcated. One strand would focus on its traditional social media business — already besieged by TikTok’s skyrocketing popularity — and the other would focus on building the metaverse.

Where We’re Now?

Meta has racked up $27 billion in operating losses over the past three years building its metaverse dreams, and now a looming economic downturn has forced it to make cutbacks for the first time in its history. So at this particularly sensitive moment, what gain does it have to show for its pain?

This October, Meta showcased what that investment has yielded so far, unveiling a new “mixed-reality” headset called the “Meta Quest Pro” at an eye-watering price-point of $1,499. But as Zuckerberg admitted to The Verge’s Alex Heath, even with that giant price tag, the machine’s not turning a profit.

Zuckerberg’s vision for the moment involves marketing two types of headsets:

“The strategy overall is not to make money on the hardware but to make it so that it can help develop the ecosystem. And then, over time, the business model will be based on software and services,” Zuckerberg told Heath.

Meta’s software and services aren’t looking too hot though.

Bad Press Sandwich

The reveal of the Quest Pro came shortly after two news reports from The Verge and The New York Times that Meta has trouble convincing its own employees to spend time in the metaverse. The Verge obtained a September memo from Meta’s VP of Metaverse Vishal Shah saying Meta’s VR Horizon Worlds social app was too buggy, and that not enough employees were using the app. In a follow-up memo, Shah said he would “hold managers accountable” if the employee users base stayed low.

Shortly after the Quest Pro’s debut, The Wall Street Journal got its hands on some internal documents that said Horizon Worlds has been bleeding users since spring 2022, falling way short of Meta’s original expectations. The Journal also featured some colorful anecdotes of its own reporters trying to use Horizons. In one, an avatar fell into a pool and couldn’t escape.

Horizon Worlds has taken a beating from the public as well, especially after Zuckerberg showed off an avatar of himself that looked bizarrely simplistic (Meta swiftly went into damage control mode and produced a still image of a much more polished virtual Zuckerberg).

Does it have legs?

Right now Metaverse hasn’t made a super-compelling case that Horizon Worlds is a good place to hang out. Its biggest announcement during the Meta Quest Pro unveiling event was that it added legs to its avatars prompting another flood of derisive and borderline horrific memes.

Zuckerberg says he’s reconciled to the metaverse losing Meta money for the next three to five years, but while Meta throws money at the concept and absorbs the bulk of public derision smaller companies are riding its slipstream to nab huge valuations and larger players are getting ready to make their own metaverse plays.

How are other players holding up?

Microsoft already has a large customer base of gamers it can access through its Xbox console, and it’s done two massive deals this year. It acquired gaming studio Activision Blizzard in an all-cash deal valued at $68.7 billion in January. Microsoft announced the purchase of AB, which is behind giant franchises including Call of Duty and World of Warcraft. Microsoft said, would provide it with “building blocks for the metaverse.” Microsoft also announced last week it was partnering up with Meta to integrate both its suite of productivity services and the Xbox cloud gaming platform. It also already has a mixed-reality headset called the “Hololens.”

Apple is expected to announce augmented-reality goggles next year, but has remained characteristically quiet about the project. Zuckerberg has already singled it out as a metaverse competitor — although he has tried to frame the rivalry as philosophical rather than commercial.

Samsung has spent some time now testing the digital waters of the metaverse. Their first venture into the metaverse was Samsung 837X, a virtual experience that replicated Samsung's flagship office in New York City. In the past year, they’ve hosted a viewing party for the Galaxy S22 launch on Samsung 837X and, just recently, also hosted a virtual concert on Roblox. They aim to lead with a multiverse of metaverse strategy by having a presence on different platforms: Roblox, Fortnite, Decentraland, and now Discord.

Final Thoughts

With every major team ramping up their efforts towards building the Metaverse, there is certainly extraordinary progress achieved. Yet, it has been around three decades since the birth of the internet and we are yet to achieve 100% penetration for Web 2.0. This presents the singular most important hurdle of all — to introduce and sustain user interest and scope of utility.

As the metaverse is built, stakeholders must focus on minimizing adoption barriers and addressing user hesitance for it to be a success. How they go about doing so will ultimately decide how the metaverse will come to be.