Turning towards the metaverse, talking ad nauseam about the metaverse, there's been a lot of snark about what exactly the metaverse is. The metaverse, a byproduct of COVID isolation, mass-produced virtual reality headsets in the burgeoning Web3 space.

If we think back a couple of years, we have huge companies investing in metaverse divisions and hiring chief metaverse officers, and whole strategies around it. Banks started opening branches in the metaverse.

Celebrities made headlines buying property in the metaverse. ETFs around the metaverse trade started popping up. We were all still sort of under pandemic lockdown, so there was over-exuberance in the metaverse because people were

looking to socialize, and it wasn't that easy to do in real life. At the peak of the metaverse hype cycle, Citibank estimated the space could hit $13 trillion in valuation by 2030. Microsoft threw its hat in the metaverse ring. Even Web

3 and crypto projects capitalized on the trend with decentralized metaverses like Decentraland and The Sandbox. People would take this sort of idea of a digital asset, apply that to the 3D virtual worlds, and voila, you got the metaverse.

But when it comes to the metaverse, no one stakes their claim on the space more than Facebook. Facebook is announcing its name change officially now, changing its corporate name to Meta. The next platform and medium will be even more immersive and

embodied internet where you're in the experience, not just looking at it. In October of 2021, Facebook CEO Mark Zuckerberg placed his trillion-dollar social media company at the forefront of the metaverse conversation, investing heavily in its Reality Labs segment, kicking off the entire hype cycle.

There was genuinely a need and a desire at the time for Facebook, the company, to rebrand into something else. Metaverse was Facebook's answer to an increasingly online population, with Zuckerberg estimating a billion users by the end of the decade. So that leads us to ask,

where is everybody? If you build it, they will come. I think we're all still waiting to see if people will come to understand the metaverse and Meta's role in the space. First, we have to figure out what exactly it is.

The metaverse cannot be defined. Kind of like a virtual, digital world, universe, if you will, in which people can essentially have, like, their internet counterpart—essentially, like an avatar of yourself—live inside this virtual world, an

open-ended, interconnected world with user-driven content and the potential for users to cross into other platforms. Trying to define what a metaverse, or the metaverse is, was kind of one of the biggest issues that actually surrounded the

metaverse overall as a concept, because it was never really universally agreed upon. Well, it's Narrator: difficult to nail down an exact definition of a metaverse. The term predates Meta and virtual reality headsets. Online platforms like Second Life came about in the

2000s and are considered early examples of metaverses, virtual spaces where players could assume digital identities and interact with other players from around the globe, originating primarily from the video game space. More recent examples of metaverses include multiplayer games like Fortnite and Roblox,

even Blizzard's World of Warcraft could be defined as a metaverse.  Fortnite and Roblox are, essentially, 2D versions of a metaverse; immersive, open-world platforms.

So, if the metaverse has already existed, why did the term gain popularity in 2021? Well, a lot of it has to do with advancements in virtual reality. If you're talking to a CTO of a big Fortune 500 company

and trying to discuss technology trends needing attention, VR and the metaverse checked all the boxes. There was a sense in 2020 and into 2021 that this was

a technology that was ready, that it was finally going to hit the big time. Because, I mean, we've had a lot of false dawns in virtual reality in the past. There have been many times when people have said, "Oh, this technology is only a year or two

away from being the next big thing," and that is where Reality Labs played a huge role for Meta, created in 2014 after its acquisition of VR startup Oculus. Meta started ramping up investment in Reality Labs over

the past five years. In December of 2021, two months after changing its name, Meta officially launched its online multiplayer virtual reality game, Horizon Worlds. You know, by the end of the decade, we hope to basically

get to around a billion people in the metaverse doing hundreds of dollars of commerce. A goal that is looking less and less achievable, I think, at the moment, as when the pictures came out of Mark Zuckerberg's avatar in Horizon Worlds a

couple of years ago, and it's this incredibly low-quality avatar. And people are like, "This is what we're supposed to be getting excited about? This is what you're saying is the future?" Who would want to go into this space?

The problem with metaverses is that people assumed they would be developed instantaneously, and even Facebook/Meta, trying to do it in an environment where they're a publicly traded company and have to show success on a quarterly basis, was even too fast for a company as well-funded as Meta was.

Now, three years after changing its name, Meta's metaverse has largely fallen out of the tech conversation. Google searches for the term "Metaverse" are near flat, just three years after hitting a peak in October of 2021. Undoubtedly, the last couple of years we've seen the

metaverse hugely drop in popularity. Now, Reality Labs faces an eye-watering $58 billion in operating losses since 2020, and insider reports from 2022 revealed Horizon Worlds was averaging around 200,000 monthly

active users in its first year,
less than half of Meta's original goal of 500,000. If it didn't do this,
and it decided just to be a social company, which it
absolutely could have done, it would have saved it billions of
dollars in terms of what it

spent on Reality Labs. So, Narrator: what happened? Why
didn't people flock to the metaverse? Well, there's been a
lot of finger-pointing, but most arguments come back to the same
conclusion. No one's really

figured out a solid use case for
the broad adoption of a metaverse. The audience wasn't
necessarily there at the time, and so, hence, I think you see
that sort of pullback away from it. Meta pitched the
metaverse as a place to both

work and play. Companies could
host virtual meetings; you could socialize with friends and
play games.  Horizon Worlds, shopping, and e-commerce were
also part of that early vision, promising all these
amazing experiences like *Ready Player One*. You know, that it
could be a wider difference than

what we're actually seeing when
we get into the device. To put it simply, people really
didn't care. Video game players had their own metaverses
already, and the metaverse hype cycle ended up being, well, a
lot of hype. And it wasn't just

Meta who felt the metaverse
bubble pop. Web3 metaverses like Decentraland and
Sandbox saw trading activity fall significantly on their sites
after 2022. Sandbox's unique active wallets, a way to measure
daily active users on the

The platform fell below 100 in early 2024, meaning less than 100 people were active on the platform day to day. 98% of those projects are totally dead today; the other 2% have lost, you know, 95% of their market cap.

Since the highs of 2021, Wall Street has been pulling back too, with several Metaverse ETFs closing up shop over the past two years. We continue to hope that somebody's going to figure out a killer use case for VR, and even Apple has struggled to do so.

So I don't think a Metaverse, anytime soon, using hardware that's readily available now, is going to be happening. So why keep investing in something that is an obvious cash burn? Well, when it comes to metas, the Metaverse, this isn't...

the metaverse. This *is* the metaverse, or at least it's a piece of it. The metaverse—it's this broad thing. It's not just virtual and augmented reality, although those are going to be some of the new major computing platforms when it comes

to defining its own metaverse. Meta says Horizon Worlds isn't the entire metaverse. It's only part of the larger, interconnected Metaverse ecosystem that includes software like Horizon Worlds and the Horizon operating system, as

well as wearables like Oculus VR headsets and Meta's newest edition, its Orion AR glasses. We've been investing in this for a long time, just because we are asking the questions about what comes after the smartphone. It's what many consider to be Meta's end game—a

a foothold in the hardware space, a space that has previously eluded them. So, playing a long game with the hope that it pays off, and the hope being it gives Meta that platform, the computing platform that they crave; the place where they can set the

rules. They don't have to abide by the rules of gatekeepers like Apple or Google. They get to have their own walls, their own building, and have their own developer ecosystem within this new computing paradigm. Meta's Oculus headsets are the top-selling virtual

reality headsets in the world, capturing 60% of the VR headset marketplace. Still, that's holding space in a seemingly declining market, as US sales of all VR and AR headsets dropped 40% in 2023 compared to the year prior. Meta did not respond to

CNBC requests for comment. Not very many companies have the luxury of having, you know, an enormous amount of cash, and having an incredibly powerful advertising business that provides them with a constant stream of money to be doing these investments. I

meet people every day who think Mark Zuckerberg invented VR, which is just a crazy notion. It is true that Meta can get its own hardware into people's hands, cutting out the middlemen of Apple and Google. Earlier this year, Mark Zuckerberg sat down with the

hosts of Acquired to discuss this exact topic, saying Meta controlling its destiny is strategically valuable.  I think we might be like, twice as profitable if we own the platform or something. So I think from that perspective, that's worth a lot, just from a purely

dollars perspective, which is not primarily how I come at this stuff. Meta was trying to become the company that was building the hard part of the metaverse, which was figuring out the hardware. It's expensive, losing a lot of money doing it, but it's a bet

that they're willing to take and controlling the hardware and software ecosystem also means access to two extremely profitable spaces that Meta is intimately familiar with: user data and in-game advertising. Advertising has grown by about 10% a year over

the last several years, and it's a roughly $140 billion industry today.  Meta's ad ambitions are much more grand than just saying, "Here's a new helmet to put on your character and dress up your avatar with."  Where, you know, coordinated Roblox are more kind

of on that tier where Meta is trying to do what they're doing with Facebook advertising. And, you know, they're trying to run the ecosystem.  All goes according to plan, you would have a big online economy going through these metaverses in the future. Metaverses, both the

physical with AR to the virtual world and, you know, full 3D VR. That's where augmented reality comes into play, an arena big tech is investing heavily in. Again, here's Mark Zuckerberg speaking with the Acquired podcast on his vision

for AR. Everyone had phones before, replaced them with smartphones, and then a lot more people got smartphones. If all we get is all the people in the world who upgrade their glasses to glasses that have AI in them, then, like, this is already

going to be one of the most successful products in the history of the world. So, and I think it's going to go a lot further than that. Traditionally, we've thought about the metaverse, or a lot of

people thought about the metaverse as specifically a 3D world and virtual reality. But, you know, Meta has really made it a point to be, oh, AR, augmented reality blended into the physical world. Is a really important play. That's

an incredibly powerful thing, if Meta is able to catch that position as a platform player for the next generation of computing, which is, I think, the real ambition here that puts it in a totally different position to where it's been

functioning so far. So maybe we haven't seen the end of Meta's metaverse ambitions. Maybe the metaverse didn't go anywhere. It could just be another decade before we see the ultimate plans of Reality Labs come to fruition.

It's absolutely been, it's been easy to tease Meta and to kind of, you know, point the finger and maybe critique the investments, and that's been a challenge for the company, but I really think it's inarguable that, if not the net

of the category, Mark, I mean, it may not still be really even alive and kicking.

Why Facebook-Parent Meta Is Willing To Lose Billions On The Metaverse

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메타버스의 초기 과대 광고와 페이스북의 리브랜딩

메타버스의 정의를 둘러싼 초기 혼란과 회의론이 있었습니다.

메타버스 이니셔티브에 대한 주요 기업의 초기 투자 금액이 상당합니다.

팬데믹 봉쇄와 사회적 고립으로 인해 메타버스에 대한 관심이 증가했습니다.

높은 밸류에이션 전망과 Microsoft와 같은 거대 기술 기업의 참여.

Facebook의 메타로의 브랜드 변경과 Reality Labs에 대한 대규모 투자.

메타의 노력에도 불구하고 광범위한 사용자 채택이 이루어지지 않는 것에 의문을 제기합니다.

메타버스와 그 선구자 정의하기

메타버스를 정의하기 어렵고, 사용자 중심의 콘텐츠가 있는 가상 세계로 설명됩니다.

세컨드 라이프와 같이 메타 및 VR 헤드셋보다 앞선 메타버전의 초기 사례입니다.

포트나이트, 로블록스, 월드 오브 워크래프트와 같은 멀티플레이어 게임을 포함한 최신 예시입니다.

가상 현실 기술의 발전으로 인해 2021년에 인기가 높아졌습니다.

메타의 지평선 세계와 메타버스 과대광고의 쇠퇴

호라이즌 월드의 출시와 야심찬 사용자 및 커머스 목표.

호라이즌 월드에서 주커버그 아바타의 낮은 품질에 대한 부정적인 반응.

즉각적인 메타버스 개발 가정과 메타가 직면한 과제

메타버스의 인기가 크게 하락하고 Reality Labs의 운영 손실이 크게 발생했습니다.

호라이즌 월드의 사용자 참여도가 낮아 당초 예상에 크게 미치지 못했습니다.

메타버스 실패의 이유 및 사용 사례 부족

메타버스에 대한 명확하고 광범위하게 매력적인 사용 사례가 부족합니다.

메타는 일과 놀이를 아우르는 메타버스에 대한 비전을 제시했지만 사용자를 사로잡는 데는 실패했습니다.

인기 하락은 메타에만 국한된 것이 아니라 다른 웹3.0 메타버스에서도 큰 폭의 하락을 경험했습니다.

샌드박스와 같은 플랫폼의 일일 활성 사용자 수가 매우 적습니다.

월스트리트에서 투자 철수, 여러 메타버스 ETF가 폐쇄되었습니다.

메타의 장기 비전과 하드웨어 초점

호라이즌 월드는 더 큰 메타버스 생태계의 한 부분일 뿐이라는 것이 메타의 관점입니다.

새로운 컴퓨팅 플랫폼을 목표로 하드웨어 분야에서 발판을 마련하기 위한 Meta의 장기 전략입니다.

메타의 Oculus 헤드셋은 감소하는 VR/AR 시장에서 시장 리더십을 유지하고 있습니다.

메타는 손실에도 불구하고 장기 투자를 지속할 수 있는 재정적 역량을 갖추고 있습니다.

플랫폼 통제의 전략적 가치에 대한 주커버그의 관점.

메타는 소프트웨어 생태계를 제어하기 위한 수단으로 하드웨어에 투자하고 있습니다.

수익성 있는 영역에 대한 액세스: 사용자 데이터 및 게임 내 광고.

메타는 메타버스 내에서 온라인 경제를 통제하려는 야망을 가지고 있습니다.

가상 현실(VR)과 증강 현실(AR) 메타버전에 모두 집중하세요.

주커버그는 AR 안경을 잠재적으로 매우 성공적인 제품으로 보고 있습니다.

메타의 장기적인 메타버스 야망

메타는 AR과 실제 세계의 통합을 강조합니다.

메타는 차세대 컴퓨팅을 위한 플랫폼 플레이어가 되고자 하는 야망을 가지고 있습니다.

메타의 메타버스 계획이 실현되기까지 시간이 더 걸릴 수 있습니다.

메타의 투자에 대한 비판을 인정하면서도 장기적인 잠재적 영향력을 강조했습니다.