The early 90s ushered in the Internet era which enabled people to access content remotely from the world wide web. In the initial days, to do so, they had to set up a dial-up connection. The network used to take a few minutes to load before a local computer could access a public switch telephone network. Once a connection was established, people could browse ‘the net’ and access largely text-based content. Loading a web page with a dial-up connection would take a while. At times, you could make a cup of tea and return to your computer monitor, and the page might still be only half-way ready. The process of loading the webpage to show content is called ‘buffering’. It simply meant that the to-be-displayed data is being pre-loaded in a certain area of the computer’s memory. Facebook co-founder Mark Zuckerberg’s metaverse adventure is in some ways similar to the roughly three-decades old dial-up modem. His version of the metaverse seems to be currently buffering.
Manufacturing virtual reality
About a year ago, in an effort to push away the spotlight from whistle-blower Frances Haugen and her allegations on how Facebook contributed to harms ranging from misinformation on the platform to impacting teenagers’ mental health, the social media firm said it was moving on to the next big thing in tech: metaverse. The company’s plan was to stitch together disparate digital worlds into one single tapestry. In fact, Facebook was already making investments in virtual reality (VR) as early as 2014, long before the company got involved in the Cambridge Analytica scandal. With the $2 billion acquisition of Oculus, the social media company was gearing up to become the world leader in immersive VR tech. At that point, Oculus had already built strong interest among developers and had received over 75,000 orders for development kits of its Oculus Rift headsets. These headsets were however, largely used for VR-specific gaming.
Zuckerberg’s vision of a metaverse was far grander and partly stemmed from Neal Stephenson’s three-decade old novel Snow Crash in which the protagonist goes back and forth between dystopian Los Angeles and a digital world. To make that vision a reality, the company has been doubling down on investments in VR. According to estimates by Bloomberg Intelligence, the metaverse could be an $800 billion opportunity by the end of 2024. But the cost of transition for Facebook was high, as it blew $10 billion in its Reality Labs division to build the business of the metaverse. In January, for the first time when Meta revealed the numbers for its hardware division, which includes the Oculus VR headsets, it showed a drop in quarterly profits by as much as 8% in the three months ending in December, compared to a year earlier.
At that point, the company was also buffeted by a change in Apple’s iOS software that made it hard for Facebook to sell targeted ads. The high cost of switching to the metaverse and the effect of the iPhone maker’s software changes made the transition difficult for the social media company. Investors were not happy as stocks tumbled nearly to a fifth during after-hours trading. The company’s shares have been down since then. In June, Zuckerberg briefly spoke about challenges in building a VR headset as it required addressing retinal projection, depth perception and high dynamic range (HDR) imaging. He moved on to note that Meta would ‘soon’ roll out a headset capable of projecting holographic images. Three months later, on October 11, he unveiled a $1,500 VR headset that was nowhere close to his idea of a virtual world seeing gadget. About the expensive goggles, a New York Times reviewer wrote, “Yes, the best [VR headset] is already here, and has been for quite some time.” And its use case continues to be confined to gaming.
A solution waiting for a problem
Meta investors are unhappy as they see the company’s boss diving deeper and deeper into the metaverse without a clear path for return on investments. This has already sent the stock down by over 60% this year. The company’s market value has collapsed by a whopping $676 billion, removing it from the ranks of the 20 largest U.S. companies, according to a report by Bloomberg.
The real challenge with Zuckerberg’s idea of the metaverse is that it still remains a niche offering, unlike his foray into social media, which was a problem waiting to be solved. When he built the social network from his Harvard dorm room, it was the product for a time when people wanted to find newer ways to stay connected as they travelled farther away from each other. With the metaverse, it feels like a solution looking for a problem. In a parallel to the dial-up modem days, the metaverse is buffering, and it is unclear in what shape or size the page will load.