With his metaverse dreams some seven to 10 years off, Meta CEO Mark Zuckerberg had to know that shareholders were in for a long, bumpy ride as the company pours billions into what he believes will be the next generation of social media, an immersive virtual reality experience entered with an expensive headset and growing acceptance of the ideal of couch-based solo socializing.
Well, with the economy tanking, ad revenues shrinking, and its shorter-term reinvention — the TikTok-style Reels short video product — cannibalizing revenue from high-earning products, Meta saw its first-ever decline in ad sales. It also came in just shy of analysts’ expectations and its metaverse division lost $2.8 billion, leading to shareholders slicing 8% of its already diminished stock price.
See also: Virtual Reality Hits Economic Reality as Meta Posts First-Ever Sales Decline
On top of that, the Federal Trade Commission (FTC) filed an anti-trust lawsuit trying to prevent Meta from buying a fairly small virtual reality (VR) company — really, none are very big — saying that it would put the social media giant “one step closer to its ultimate goal of owning the entire ‘Metaverse’ by buying “its way to the top” rather than “competing on the merits.”
Read more: FTC Lawsuit Shows Faith in Meta’s Trillion-Dollar Metaverse Ambitions
But while the FTC’s lawsuit shows that it at least has faith in Zuckerberg’s vision, one of crypto’s leading lights, Ethereum creator Vitalik Buterin, threw cold water on Meta’s metaverse ambitions.
“The ‘metaverse’ is going to happen but I don’t think any of the existing corporate attempts to intentionally create the metaverse are going anywhere,” Buterin tweeted on July 30.
See more: Ethereum’s Founder Says Meta’s Metaverse Vision Is Doomed
Shrugging off a comment that the high barrier to entry caused by the metaverse’s need for VR goggles — Meta’s top-selling Quest 2 just saw its base price jump $100 to $400 — Buterin replied that his “critique is deeper than “Metaverse Wikipedia will beat Metaverse” Encyclopedia Britannica.” It’s that we don’t really know the definition of “the metaverse” yet, it’s far too early to know what people actually want. So anything Facebook creates now will misfire.”
To be fair to Zuckerberg, Buterin is making a basic point. Having said that a true metaverse is seven to 10 years off, it’s fairly clear that Meta’s timeline includes not only overcoming technical hurdles — those Quest 2s aren’t close to what’s really needed — but giving time for the final shape of the metaverse to evolve . And, if the FTC is right, time for Meta to buy its way to the top of the immersive VR heap.
On the other hand, Zuckerberg also pointed to Apple as the real metaverse threat, saying the two companies were in a “very deep, philosophical competition” to build the metaverse, The Verge reported on July 26.
In an employee talk last month, Zuckerberg said it was going head-to-head with Apple — whose privacy policies have butchered his ad sales — over “what direction the internet should go in.”
It is, he added “a competition of philosophies and ideas, where they believe that by doing everything themselves and tightly integrating that they build a better consumer experience.”
Meta, he said, believes “that there is a lot to be done in specialization across different companies, and [that] will allow a much larger ecosystem to exist.”
And be bought if it starts to succeed, in the FTC’s opinion.