Legs are Coming Soon!
For those of you wondering about this week’s title, it is, of course, a reference to Mark Zuckerberg’s most recent announcement regarding the Metaverse. It is now also an intrusive thought I can’t stop repeating to myself. Legs are coming!!!!
If you haven’t heard, the avatars of the Metaverse have now been given legs. In a deeply delusional moment Mark announced, “Everyone has been waiting for this”, and further, “But seriously, legs are hard, which is why other virtual reality systems don’t have them either”.
I love the way that Mark will not be deterred from this multi-billion-dollar dumpster fire of an idea that absolutely no one cares about or has interest in partaking in. He is forging full speed ahead, despite the fact no one wants to spend any time with him in that digital realm except for unsocialized Republican basement dwellers. And probably Elon Musk.
For those who have never experienced what’s going on in the Wild Wild West of the internet, allow me to suggest this clip of my favorite YouTuber H3 wandering around in there trying to get himself banned. I feel like it’s a solid primer to all the infinitely dumb things you encounter out there in the Metaverse, as well as it’s extreme, chaotic limitations.
I decided to talk about our boy Mark this week because he is having an even rougher go than usual. On my good days I try to have empathy – walking around in public with that haircut can’t be easy. On my bad days, I find headlines like this all quite amusing…
Meta Is the S&P 500’s Worst Performer Of 2022 as Losses Near 75%
At the beginning of the month Meta became the biggest loser on the S&P 500.
We know Mark was serious about the Metaverse because he changed the highly recognizable company name that made him billions, “Facebook”, to the much more confusing and vague title “Meta”. Unfortunately, while Zuck was busy pouring billions into the Metaverse to make his vision a reality, back home at Meta HQ, Rome burns. What began as murmurs of discontent amongst shareholders have become a full-blown revolt.
For those of you blissfully unfamiliar with the “Metaverse”: It is a 3D virtual world intended to replace much of the real-world socializing. I am not even going to get into how deeply problematic the concept is, I’m sure you get it.
Bleeding billions.
Mark warned last year that the Metaverse would be an expensive undertaking. But inattentive shareholders are only just waking up to how expensive it really is. The Metaverse has swallowed up over $15 billion of R&D expenditure in the past year alone. The cumulative expenditure to date is $36 billion – a sum more than double the annual GDP of Jamaica. Fun fact.
On a more intimate note, Mark has fallen significantly behind in the infamous “who is the richest white man” race. Zuck’s net worth has fallen by $104 billion over the past year to $32.8 billion. He went from being the third-wealthiest person in the world as of last October to now only the 29th-richest. This actually must just be, like, so hard for him.
Sit in it.
In an even more depressing turn of events, there’s nothing that aforementioned angry shareholders can do about it.
Google popularised a new model of ownership when it undertook a public offering in 2004, in which the founders maintain outsized voting rights. This model was followed by Facebook after it held its initial public offering in 2012.
So, Mark owns only 13% of the value of the shares, but has 54% of the vote. Not only does this ensure Meta is a private fiefdom, but it also means that non-voting stockholders disproportionately suffer the consequences of Zuckerberg’s decisions.
The Future of the Metaverse…
Beyond the losses in its metaverse unit, Meta is facing fierce competition from TikTok for ad dollars—the source of the majority of its revenue—as well as a broader advertiser pullback amid concerns about an impending recession. (As if the leftover mental health problems from the pandemic weren't enough).
Adding to its advertising woes, the social network is still reeling from privacy changes made by Apple last year that make it harder for tech companies to track users across apps, which has cut into its ad revenue.
To summarize the backdrop here:
Weak global economy,
Competition from TikTok and BeReal for eyeballs,
Competition from Netflix and Disney+ for advertisers,
Concerns around the profitability and ROI (return on investment) of the metaverse,
And the ever-present threat of regulation.
However, if we can count on anything at all, it is a rich white man’s delusion. Mark levels with the shareholders and the people…
“Look, I get that a lot of people might disagree with this investment. But from what I can tell, I think that this is going to be a very important thing, and I think it would be a mistake for us to not focus on any of these areas, which I think are going to be fundamentally important to the future.” – Mark
A less delusional perspective:
Thematic analyst at GlobalData and woman who would never spend billions of dollars creating the “metaverse” Rachel Foster Jones argues, “The cost of Mark Zuckerberg’s metaverse ambition is clearer than ever. Meta has put its entire business on the line for the metaverse, which still doesn’t exist, and the gamble is not paying off.”
“Meta has been too busy attempting to push the metaverse that it has run its core ad business into the ground, and a string of poor results has taken its toll on investor confidence.”
She furthers, “The metaverse will probably not be profitable for another decade, and threats of hiring freezes are not enough to convince investors that Meta is focusing on what will pay the bills now”.
Where is all this money going?
The company’s virtual world, Horizon, is far from industry-leading, with its simplistic appearance drawing unflattering comparisons with Linden Labs’ 2003 cult hit Second Life or Sony’s 2008 metaverse flop PlayStation Home.
Its recently released Quest Pro headset has drawn headlines for its capability – but also for its eye-watering $1,499 price.
Oh, and did I mention? Mark’s ominous remark “Legs are coming” was released alongside footage that was pre-rendered from motion capture, not generated by the new headset. (The tea here is that they tried to make it look like it was generated by the new headset and then had to backtrack – embarrassing).
This whole ordeal should probably have been a warning for the results to come:
Facebook’s metaverse doesn’t really have legs.
Until the next.