October 2021 marked a significant turning point for Facebook CEO Mark Zuckerberg, as he steered his trillion-dollar social media company in a new direction by rebranding it as Meta and setting his sights on the metaverse. The move aimed to distance the company from its social media image and highlight its broader ambitions.
The concept of the metaverse predates Facebook, but Zuckerberg’s vision for it has been within Meta since its acquisition of virtual reality headset developer Oculus and the launch of Reality Labs in 2014. By 2021, the global video game industry was generating over $193 billion in revenue, and Meta saw an opportunity to ride the virtual reality wave.
However, the metaverse’s progress has been slower than anticipated. In December 2021, Meta launched Horizon Worlds, an open-world virtual reality platform, with a goal of reaching 500,000 monthly active users by the end of the year. The long-term goal was more ambitious, with Zuckerberg expecting one billion users by the end of the decade, with each doing “hundreds of dollars of e-commerce each.” Reality Labs, the company’s metaverse-focused division, has been hemorrhaging cash, recording $58 billion in operating losses since 2020.
A report by The Wall Street Journal in 2022 stated that Horizon Worlds had only around 200,000 monthly active users, a far cry from the target. The term “metaverse” has largely fallen out of the public conversation, with Google Trends noting a significant decline in search queries. Meta did not respond to the CNBC request for comment.
The metaverse, in theory, is a virtual reality space where users can socialize, work, and play, blurring the lines between the physical and digital worlds. However, the technology remains in its early stages, and Meta’s missteps have left many wondering what exactly happened to the metaverse.