So how's the Metaverse going?

a couple thoughts about the short-term and the long-term digital future

Today was the big Meta Connect conference. Mark Zuckerberg unveiled his company’s next-gen headset, the Meta Quest Pro. It’s fancy as hell, supposedly a serious upgrade on that Meta Quest 2. It’s also $1,500, so… I don’t think he’s actually expecting you to buy one?

This seems like a good moment to check in on how the entire Metaverse project as a whole is going. I’ve written about the Metaverse a couple of times before — in WIRED last summer (“Virtual Reality Is the Rich White Kid of Tech”), and on this Substack just after the animatronic-dog Superbowl Ad.

I thought the ad was the one moment when I got what the Metaverse could possibly become — it’s not a place to make new friends; it’s a nostalgia machine for hanging out with old ones. But that’s just an evocative ad. As I wrote for WIRED, I think that Virtual Reality suffers from a pretty intense version of the Field of Dreams Fallacy. It’s a technology that has been on the verge of breaking through every year for the past decade. (It was also on the verge of breaking through in the 1980s and early 1990s.) At some point, we have to consider the possibility that the problem with VR is that people don’t actually want it. (I think the same is likely true for Mixed Reality and Augmented Reality headsets, though it may genuinely be too early to tell with those.)

The weird thing about the WIRED article is that it ended up being much-more-timely than I expected. I spent a couple of weeks tinkering with it. I had it in good shape. The editor was happy. And then Mark Zuckerberg gave an interview where he said he expected within the next five years “from people seeing us [Facebook] primarily being a social media company to being a Metaverse company.” Suddenly my grousing about VR and the Metaverse was timely.

As I wrote on Substack at the time:

This is going to be one hell of a test of my skepticism. Zuckerberg isn’t just blowing smoke — he is staffing up the already-huge AR/VR division, and putting the weight of a trillion-dollar company behind this vision. There’s a real chance that people will one day point-and-laugh at my published skepticism. The Metaverse is either going to become a reality in the next five years or it is going to be a huge, costly mistake for one of the biggest companies on the planet.

Now, one year later:

-Facebook has been rebranded as Meta.

-The company’s stock is down 62% on the year-to-date. Meta is no longer a trillion-dollar company. It’s more like a $345 billion dollar company (that’s still a lot of dollars!). This is part of an industry-wide downturn, but Meta is doing worse than most of its industry peers. The company has implemented a hiring freeze.

-The company has spent over $10 billion on its hardware division. It hasn’t gone great.

-The Oculus/Meta Quest 2 headset has sold 15M units. (I even bought one!) They jacked up the price by $100. But a lot of those headsets gather dust after the novelty wears off (I’ve used mine… four times? Meh.). If VR gaming is the future, it still definitely isn’t the present.

-But the company is adding legs to the avatars in Horizon Worlds soon. So… yeah. At least there’s that.

Meta @Meta

legs

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I’m puzzled by the broader strategy here with Meta Quest Pro. A year ago, it seemed like Facebook/Meta’s plan was:

(1) flood the headset market with affordable, high-quality devices. (become the go-to hardware provider.)

(2) Invest in Horizon Workrooms and Horizon Worlds as the go-to venues for work and play in the new, next-generation “embodied internet.” (become the go-to software platform.)

(3) Wait for killer apps to emerge once people get used to VR. Tack on MR and AR along the way. (Make limitless piles of money once people adapt to the thing, taking a cut of the profits whatever direction the future takes.)

That’s a reasonable business strategy. I don’t like it, because I don’t like big tech monopolies and I especially don’t trust this particular big tech monopoly. But I get it.

But how the hell does the $1,500 Meta Quest Pro figure in to that strategy?

A $1,500 premium product makes sense once everyone is invested in the Metaverse and some people want the fancier version. But $1,500 for a better Beat Saber experience? I don’t get it.

It seems as though the $1,500 version is aimed at business customers. Meta announced new partnerships with Microsoft and Accenture. And, sure, I can see the case for an enterprise market here. You have global corporations trying to hybrid work/work-from-home expectations among white-collar employees. Convince them that Horizon Workrooms is a significant upgrade over Zoom calls and that’s a sizable market segment.

But it’s also the graveyard of wearable technologies. VR enthusiasts in the 1990s insisted that VR didn’t die! It was still being used by the military and doctors and architects! Google Glass enthusiasts insisted for years that Glass wasn’t a failure! It was being used in manufacturing and medical practices and the military. The fabled Augmented Reality company, Magic Leap, didn’t fail to release a viable consumer product. It pivoted to the enterprise market!

Maybe this time will be different, post-pandemic. But the path from “expensive accessory for mid-level corporate execs” to “the biggest consumer-facing hardware revolution since the iPhone” is, uh, a little rocky.

All of which is to say… yeah, by 2026, I don’t think we’ll be much closer to the consumer Metaverse than we are today. Meta has burned one year and $10 billion so far. The future isn’t coming soon.

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But this raises a broader point that I want to make about tech predictions. I think everyone (myself included) should behave as though we are far less certain about the long-term than we are about the short- and medium-term.

Will people be using some sort of Heads-Up Display to navigate the Internet/the global data layer fifty years from now? I dunno, but it sure seems possible. Long-distance travel probably needs to become less common as we (hopefully) get carbon emissions under control. That could create a huge market for virtual co-presence. Gaming and entertainment in 2022 is nothing like gaming/entertainment in 1972, which was nothing like gaming/entertainment in 1922. If I’m still alive 50 years from now, the one thing I’m sure of is that I’ll find entertainment culture to be weird and unnerving.

It calls to mind an old Paul Krugman quote that I saw making the rounds again this weekend:

Jon Erlichman @JonErlichman

An internet prediction from 1998:

This is one of the iconic examples that the tech evangelists like to trot out. Nobel Prize-winner Paul Krugman dismissing the internet’s impact as “no greater than the fax machine’s.” If you read the replies to Erlichman’s tweet, it’s filled with people gleefully dunking on Krugman for being so shortsighted.

But what strikes me about the quote is that it’s only half-wrong.

Krugman is making two claims here: (1) the people predicting the trajectory of the Internet’s growth circa 1998 are full of shit, leaning on concepts like “Metcalfe’s Law” that are untested nonsense, and (2) once the bubble bursts, the Internet’s role in society will be a lot smaller than it seems.

This was in 1998. The first dotcom bubble was already seriously inflating. (It would reach its glorious, absurd peak in late 1999.) It looked to Krugman and others like a speculative frenzy. Tech evangelists like George Gilder insisted instead that the Internet was fundamentally different from previous communications technologies. “Metcalfe’s Law,” was, basically, a precursor to blitzscaling. Metcalfe’s Law states that the value of a digital communications network is equal to the square of the number of nodes in the network. The larger the network becomes, the more valuable it inherently is! This makes intuitive sense on paper, when dealing with small numbers. It makes no sense in reality, when dealing with massive numbers. When Facebook adds it’s 3-billionth user, it does not become even trivially more valuable than it was with 2,999,999,999 users.

So Krugman, circa 1998, was taking the measure of this tech stock bubble and saying, effectively, “none of this makes sense. It’s all going to crash. And after the crash, your big promises are going to seem pretty ridiculous.”

And it did crash. In March 2000. Krugman was right. A lot of that tech evangelist talk from the mid-1990s was absolute bullshit, aimed at inflating a speculative boom. (Brent Goldfarb and David Kirsch have an excellent book on this general phenomenon — Bubbles and Crashes.)

But what Krugman was wrong about was the longer term. After the crash, people still used the Internet plenty. They just didn’t interact with the emptied-out husks of the old dotcom firms. And those people started to co-create other, more interesting ventures. Wikipedia, napster, social networks, the blogosphere, meetup.com. Krugman looks foolish for his 2005 prediction, because he didn’t have any sense of what would come after the crash.

The people gleefully dunking on Krugman’s 1998 comment today are forgetting what happened in 2000, 2001, and 2002. He was right about the hollow core of the 1990s tech boom. But he was overconfident about what would come next.

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So today, after a full year of Metaverse hype and truly absurd levels of spending on hardware and software development, here’s my updated skeptical take:

In 2026, I don’t think the Metaverse is going to be much of anything. VR is going to stay a niche hobbyist product. MR and AR will struggle for meaningful use cases. The companies that throw their fortunes into building the Metaverse are either going to go broke or are going to execute a significant pivot.

But I don’t know what comes after the crash. Nobody does. Too much is uncertain. The future will be different, we just don’t know how.