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Zuckerberg’s metaverse rush pauses for ‘quality lockdown’

by Ozva Admin

In early September, mark zuckerberg he rushed to a Meta lab in Pittsburgh, sat in front of over 100 high-resolution cameras, and prepared to prove his metaverse critics wrong.

The photo shoot was designed to create a more realistic avatar in the likeness of Meta’s CEO, as the social media giant scrambled to demonstrate that its $10 billion-a-year bet on a futuristic 3D digital world known as the metaverse was not a failure.

In the weeks prior, the Facebook founder had faced public ridicule after an earlier cartoon-like avatar selfie went viral for all the wrong reasons.

That rudimentary image was widely derided as “shameful” and “soulless,” piling pressure on Zuckerberg to show that he had not misjudged staking his company’s future on a vision of the metaverse that had already racked up more than $27 billion in losses. operating in the last three years.

But the selfie episode is just one hurdle facing Zuckerberg, who believes the metaverse is the natural next step. evolution in online socializing and is expected to introduce the new avatar as soon as next week.

According to memos and conversations with 10 current and former employees, its social media empire of 3 billion users is experiencing disruption and challenges as part of the pivot to Goaland has already been forced to delay future releases and adjust expectations.

In a September memo seen by the Financial Times, Vishal Shah, vice president of Meta’s metaverse arm, warned that users and creators had complained that Horizon Worlds, its social VR experience and the closest thing it has to a metaverse until now, it was of low quality and full of bugs.

He ordered a “quality lockdown” for the rest of the year, telling staff they need to improve fundamentals before any aggressive expansion. Staff working on the product had to “reprioritize or slow down some things that we had planned,” Shah said, adding that he was lowering his target number of users for the second half of the year.

Mark Zuckerberg avatar selfie
Mark Zuckerberg faced ridicule for his rudimentary avatar selfie for the metaverse, which was described as “embarrassing” and “soulless”.

Some employees warned that morale was suffering as teams restructured to fit Zuckerberg’s new vision, which many have yet to buy into. “There are many people internally who have never worn a [virtual reality] headphones,” said a metaverse employee.

Meta said in a statement that the company was “confident that the metaverse is the future of computing and that it should be built around people.” She added: “Of course, we are always making quality improvements and acting on feedback from our community of creators. This is a multi-year journey, and we’re going to continue to improve what we build.”

in the metaverse

Has been almost a year since Zuckerberg announced his pivot goal. His plan was to eventually attract 1 billion users and “hundreds of billions of dollars of digital commerce per day,” a move that would take five to 10 years, he said.

Zuckerberg declared that from now on “we will be the metaverse first, not Facebook first,” relegating the social network he founded in 2004, and which generates the vast majority of his $118 billion annual revenue today, to a status secondary. Reality Labs, the division dedicated to the metaverse, would see a doubling of its workforce to 20,000 engineers.

Meta currently has more than 83,000 employees after expanding rapidly during the pandemic, and has tapped virtual and augmented reality engineering talent from rivals Microsoft and Apple as it looks to bolster its metaverse team.

But the push into the metaverse comes as the group’s market valuation has plummeted from $1 trillion to less than $400 billion in the last 14 months. The company faces several headwinds: a drop in digital ad revenue, slowing user growth on its Facebook platform and growing competition from TikTok, a deep-pocketed Chinese rival.

Last week, Zuckerberg announced a hiring freeze at most teams and a belt-tightening until 2023 given the difficult macroeconomic backdrop. Zuckerberg has also ordered employees to work with “increased intensity” and a “sense of urgency,” according to a July memo.

Line chart of Meta stock price ($) showing Facebook's bumpy road to the metaverse

Analysts and employees said the next few years would determine whether its metaverse shift was the answer to these problems: new revenue streams to capture the next generation of Internet users, or a major distraction that sucked up resources and limited the company’s ability to deliver. revive your legacy product. and rebuild your ad infrastructure.

“The challenge is that they are so focused on the metaverse that they are not investing in the core product that is Facebook and Instagram. This is all a sideshow to the real problem, which is TikTok continuing to wipe its clock,” said Rich Greenfield, an analyst at LightShed Partners.

He added that Meta’s level of investment in the metaverse was “concerning” for investors. “The metaverse, as imagined by Meta, is not invertible today. No one is buying Meta for the metaverse.”

big investments

Since the beginning of 2019, Reality Labs, Meta’s metaverse and virtual reality division, has reported operating losses of more than $27 billion.

According to people familiar with the situation, the investments have largely been focused on developing hardware, such as virtual and augmented reality headsets, that can be used to log into the metaverse, along with software for its 3D world and the underlying infrastructure needed to support the system.

In addition to the avatars that will represent users in the metaverse, the company has been working on activities that go beyond simple socializing to give them something to do, from working out in virtual fitness programs to playing games and even places to hang out. The education.

In its latest results for July, the company said it had $24 billion in non-cancelable contractual commitments “primarily related to our investments in servers, network infrastructure, and consumer hardware products at Reality Labs.”

Meanwhile, the division’s revenue, which comes largely from VR headset sales, remains meager, in part due to the fact that the entire VR industry has developed more slowly than anticipated. In the second quarter, Reality Labs accounted for $452 million of $28 billion in total revenue, and the company warned that it expected Reality Labs revenue in the coming quarter to be even lower.

“It’s a big bet,” said one advertising executive. “If you mess up the timeline [too early] in 10 years, the company is really in jeopardy given how capital intensive it is.”

The recent restructuring and abandonment of several projects to prioritize the metaverse has hit morale, according to several current and former employees, with some reporting an unhelpful split between metaverse-focused staff and those in the legacy part of the business.

Devon Copley, CEO of Avatour, a virtual meeting company, said Meta was “leading the industry” when it came to hardware development.

However, he warned that the company faced more challenges in developing software for the metaverse.

“The problem is the fragmented nature of the different software product teams and initiatives within the Meta org,” he said, citing constant reorganizations, “frequent changes of direction” and lack of a “coherent vision” for a social network. that incorporates virtual networks. and augmented reality.

The company is already struggling to impress creators developing social experiences in the metaverse. According to a Meta memo shared by a person on their Facebook profile, the creators complained at a roundtable last month that Horizon Worlds was “unstable and unreliable” and that Meta staff didn’t provide them with updates when they reported bugs. or before launches.

Employees “are not communicating well or it could be understaffing and things are falling through the cracks,” one metaverse employee said.

In Shah’s memo, which was first reported by The Verge, the Meta exec said the Horizon Worlds team had intentionally pivoted toward “faster shipping” but that this had led employees to “change the quality for the sake of speed.”

The bugs and stability issues were so severe, Shah noted, that Meta’s own employees weren’t even using the product.

He added: “The simple truth is, if we don’t love it, how can we expect our users to love it?”

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