Meta Mutes its Metaverse Plans. Is it the End for the Metaverse?

Zuckerberg just pivoted an 80,000+ employee company faster than most 8-employee startups. Just 16 months after rebranding to Meta, they’re switching focus to Generative AI. They no longer care about bringing billions of people into the metaverse. They're even discontinuing their flagship VR app, Echo VR.

"We're creating a new top-level product group at Meta focused on generative AI to turbocharge our work in this area," Zuckerberg said in a Feb. 27 post on Facebook.

"We're starting by pulling together a lot of the teams working on generative AI across the company into one group focused on building delightful experiences around this technology… In the short term, we'll focus on building creative and expressive tools. Over the longer term, we'll focus on developing AI personas that can help people in a variety of ways."

"About 80% of our investments – a little more – go towards the core business, what we call our family of apps, so that's Facebook, Instagram, WhatsApp, Messenger, and the ads business associated with that. Then a little less than 20% of our investment goes towards Reality Labs," the CEO told The New York Times Dealbook conference last November. – TheStreet

After taking a $24B loss in Reality Labs between 2021 and 2022, shareholders seem thrilled about this pivot – Meta’s stock is up about 8% since the news (quietly) broke Monday.

They’re not abandoning the metaverse altogether. They’ll still develop the virtual world and progress their headsets, but with a targeted focus on gamers and other obvious metaverse verticals.

I’m not entirely shocked. If you read The Metaverse Handbook, you’ll recall me dedicating a large section of Chapter 1 to discussing the future of bots and their importance in the metaverse. Basically, I talked about how these “AI Personas” will be crucial to helping us navigate, create, and automate things in the metaverse. And now Zuck is focusing on building that exact category of tech (whether they’ll be integrated into the metaverse or not).

WTF? The Metaverse is Finished…

Well, this is what most people will be led to believe based on Meta’s departure. However, I would argue the opposite. I believe with Meta toning down the metaverse hype, we will have much more visibility into what the little players are doing since there’s more room for their press to surface. Frankly, brands should be more interested in metaverse marketing activations for that reason.

Taco Bell, for example, just married a couple in the metaverse. The restaurant chain opened a competition last year for couples willing to participate in a wedding in Decentraland, and selected one couple from San Francisco out of the 300 who applied. The wedding took place in a virtual world but included some IRL traditions to reflect the couple’s Indian heritage, including a baraat where the groom was led to the venue on an adorned digital elephant.

Colombia held a 2.5 hour court hearing in Meta’s metaverse in mid-February, making it an unprecedented moment for the metaverse.

Lawyers in Colombia donned VR headsets while using Horizon Workrooms, Meta's virtual meeting space platform, during which they walked around as animated avatars in the staid courtroom to plead their case. The request for the hearing to occur in the metaverse was initiated by the plaintiff (the Temporary Union of Integrated and Specialized Services of Traffic and Transportation of Santa Marta) which was suing the national police and the Ministry of Defense. All of the parties consented to having the trial in the metaverse, including the Public Ministry's office. – TheStreet

With Meta out of the daily metaverse press cycle, I imagine a greater spotlight on stuff like this.

Lastly, I still believe that those builders, creators, and investors in the digital asset world (crypto and NFTs) need the metaverse to realize their value fully. Digital assets need digital homes where they can be displayed, recognized, and have utility. And the NFT market is on a tear right now.

DappRadar released its February industry report this week, which showed NFT trading volume skyrocketed 117% month-over-month to $2 billion, even though the number of sales decreased 31%. Less quantity but higher price tags means the big movers may be getting back in. Not to mention, Bitcoin NFTs (known as Ordinals) are beginning to take off. OpenSea has a massive new competitor in Blur, which had the upper hand in trading volume with $1.3 billion in February, compared to OpenSea’s $587 million. Between the two marketplaces, more than 400,000 unique wallets transacted NFTs in February.

Overall, as a metaverse-minded creator myself, I do feel a bit betrayed by Meta. However, they still helped introduce the world to this technology and gave us a nice boost of hope for this future, which I hope will sustain even without Meta’s full attention.