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How Mark Zuckerberg got lost in a bizarre virtual world

How Mark Zuckerberg got lost in a bizarre virtual world
How Mark Zuckerberg got lost in a bizarre virtual world

Every day, Mark Zuckerberg wakes up to a flood of bad news. “I look at my phone to get like a million messages,” he says. “It’s usually not good.”

The founder of Facebook, now known as Meta, has been forced to grapple with a stream of crises that have beset the technology giant in recent years, raising fundamental questions about its future.

Privacy scandals, internal dissent and high-profile departures are just some of the issues weighing on the Silicon Valley prince’s head.

In one of the biggest blows, Sheryl Sandberg, Zuckerberg’s chief operating officer and top lieutenant for 14 years, will leave this autumn. Sir Nick Clegg, the company’s most senior communicator, has departed sunny California to live in London again.

“It’s almost like every day you wake up and get punched in the stomach. It’s like, okay, well f—,” Zuckerberg complained on a podcast last month.

Zuckerberg. Clegg, Sandberg
Zuckerberg. Clegg, Sandberg

Where other chief executives might throw in the towel, the computer programming prodigy has responded by fashioning his own alternative world instead – a bizarre, virtual space that he and others call “the metaverse”.

In this digital expanse, users will be able to meet loved ones, visit imaginary places and browse endless high streets, all without leaving their living room.

Launching the metaverse will involve what is arguably the biggest shake-up ever at Facebook, which was originally conceived as a “hot or not” website in Zuckerberg’s Harvard dormitory 18 years ago but has grown to become a vast social network with more than 3.5 billion users.

The company, which is worth more than $380bn, today controls an empire that also includes picture-sharing network Instagram and messaging service Whatsapp. It generates billions of dollars in profits each year.

By ploughing tens of billions of dollars into the metaverse Zuckerberg is arguably risking it all, betting that in future people will want to spend more time – not less – immersed in digital worlds of his making.

The effort is set against a backdrop of waning interest in Facebook among critical younger users, with apps such as TikTok increasingly taking market share from Instagram. This summer, Meta reported its first ever fall in revenues after over 15 years of constant growth.

Dan Ives, a veteran Wall Street technology analyst, says: “Right now, I think it’s some of the darkest days that we've seen for Facebook.

“With the metaverse, there’s so much scepticism. Zuckerberg and his team face some of the biggest fundamental challenges they ever have as a company.”

Pull on a VR headset and you can quickly get a flavour of Zuckerberg’s vision for the metaverse. The goggles are a snug fit and weigh about a pound. Soon after powering them up, you can plug in to Meta’s new flagship platform: Horizon Worlds.

In this hybrid between a video game and social network, users can wander through magical and science fiction worlds, castles and space stations, chatting and playing games.

Zuckerberg Meta - Reuters/Facebook
Zuckerberg Meta - Reuters/Facebook

A new reality?

But if Meta is to be believed, Horizon Worlds is just a flavour of what the metaverse will become.

While the early use cases for the metaverse have tended to be games, Meta’s argument is that one day this virtual environment will overlap with social media and daily life.

Uses could range from holding work meetings inside digital conference rooms to attending virtual concerts and even shopping online using currencies that are only traded in the metaverse.

Brands such as Nike and Tiffany are already experimenting with their own forms of digital currency in the form of “non-fungible tokens”, a kind of tradeable, digital collectible. The bigger picture is a digital realm where games, e-commerce, TV, music and entertainment all combine into one experience.

This would allow you to quickly swap between apps that use VR, where you are fully immersed in a 3D digital experience, or augmented reality (AR), where the virtual world is overlaid on the real world – not unlike toggling between apps on your phone. Interactive holograms will be dotted through the real world, linking the physical realm to the metaverse.

In Zuckerberg’s vision, Meta will be the leading metaverse company, selling the hardware you need to enter it and building the software that underpins everything.

His decision to rebrand Facebook as “Meta” last year unleashed a wave of marketing jargon and gushing from start-up founders.

“We’ll be able to feel present like we’re right there with people no matter how far apart we actually are,” Zuckerberg said at the time.

“When I send my parents a video of my kids, they’re going to feel like they’re right in the moment with us, not peering through a little window.

“That’s what we mean by an embodied internet. Instead of looking at a screen, you’re going to be in these experiences.”

The word “metaverse”, a blend of “meta” (more than) and “universe”, was coined in the 1992 science fiction novel Snow Crash by Neal Stephenson. Characters put on VR goggles and jumped into a giant virtual city.

Matthew Ball, a venture capitalist who has written extensively about the metaverse, says key elements include a massive number of users, an instantly rendered, persistent 3D world and an individual sense of presence. “A simpler way to think about the metaverse is as a live, shared and 3D version of the internet,” he says.

Zuckerberg’s attempts to render this idea reality have been compared to the 2018 film Ready Player One, a science fiction story about a boy who escapes his mundane reality in the physical world to become a hero in the virtual metropolis of “Oasis”.

If Zuckerberg’s bet comes good, the prize could be enormous. Analysis commissioned by Meta claimed the technology could contribute $3 trillion to the global economy by 2030 and reach a billion people.

Yet so far, his attempts to build his own Oasis have fallen far short of the concept’s utopian promise.

The appearance of Meta’s metaverse is far behind Zuckerberg’s ambition and rudimentary compared to many pre-existing video games. All the strange avatars on Horizon Worlds appear without legs, with their torso, arms and heads simply floating in the air. Meta’s previews of the experience – caveated with disclaimers that the visuals are still being worked on – have involved Zuckerberg doing sitting interviews and playing cards with his friends.

In another example, a cartoonish “selfie” taken by the chief executive’s avatar in front of Eiffel Tower and Sagrada Família lookalikes in the metaverse was mocked for its low fidelity.

Even the Meta founder later admitted it was “pretty basic”.

Metaverse cynics make comparisons to Second Life, an online world first launched in 2003. In Second Life, users interacted as avatars in a virtual version of the real world. Its early popularity led schools and colleges to open digital campuses in the game.

People held virtual weddings in Second Life. Countries opened functioning digital embassies and a virtual newspaper was bought and sold for LindenDollars – named for Linden Labs, the company behind it.

The hype did not last. Second Life is still online, but only attracts around 40,000 active users at any given time.

The metaverse will rely heavily on VR, which is not new. Companies such as Atari, Sega and Nintendo also experimented with headsets during the 1980s and Nineties but they never took off.

Low quality graphics make for a stomach churning experience, and many users still complain VR makes them nauseous.

Proponents argue that high definition screens and increasingly powerful processors have improved the experience dramatically in the last decade. In 2014, Facebook acquired Oculus, a VR company, for $2bn. Meta has since ploughed more cash into improving its headset devices and making them cheaper.

The problem is that hardly anyone is still using them. Only about 600,000 households in the UK own a VR headset. For the most part users are male, older millennials, according to Digital Catapult.

This is, in no small part, down to the price of admission. Just to enter Zuckerberg’s digital world, consumers must fork out £400 for VR headsets such as Meta’s Quest 2.

Other devices can be bought for as little as £50, but these are extremely limited in terms of graphics and battery life.

“Ultimately this is still at an early stage and has some way to go before its mass market and is widely accepted,” says Paolo Pescatore, a consumer technology analyst at PP Foresight.

Another issue is that the concept of the metaverse remains nebulous. Most technologists don’t agree on what it will actually look like and “even the name is confusing to the average person on the high street”, Pescatore says.

Back in the real world

Perhaps more concerningly, despite billions of dollars of investment, there is little so far to show for all Zuckerberg’s spending. Virtual reality (VR) is not yet widely adopted and many of Meta’s most ambitious projects for the metaverse remain years from reality.

Its main effort so far – Horizon Worlds – has come in for ridicule. The service has only around 300,000 monthly users, Zuckerberg said in January, and Facebook has been forced to offer developers $10m to build experiences to go in its game.

Already, investors are beginning to baulk at the eye-watering costs. Meta lost $10bn on its “Reality Labs” division, which is spearheading the effort, last year.

In the three months to June it burnt through another $2.2bn. Over the 12 months the company’s market value has more than halved as shareholders grow more sceptical. Meta said losses were part of its long-term investments.

The company added that its VR users had already spent $1.5bn in its Quest headset’s app store. It gets a 30pc cut from spending on these apps.

The bet is costing Zuckerberg personally too. His net worth has fallen by more than $70bn this year amid a sharp drop in Meta’s stock price.

Roger McNamee, an early investor-turned Facebook critic who was once a close confidante of Zuckerberg, says: “Facebook spent tens of billions to produce a demo that somehow is both dystopian and laughably bad.”

Looming over fans last August, singer Ariana Grande reeled off her greatest hits as she has done on countless nights. But this was no ordinary gig: Grande was performing as a giant, virtual avatar as video gamers soared through dungeons, clouds and toadstools in the video game Fortnite.

Alex Wills, chief experience officer at British tech company Disguise, watched using his avatar. He had plenty of reasons to take an interest. Disguise had already provided immersive set technology for the pop star’s live tours and the virtual effects company has now begun embracing the metaverse and its possibilities for digital music.

The worlds of pop, movies and gaming have collided in Fortnite, which was originally just a “shoot’em up” title. Developed by Epic Games and played by 270 million people worldwide, Fortnite is now held up as an early example of a metaverse.

“Fortnite started off as a battle royale game – a shooting game – and what it has transitioned into, and this is another link to Meta, is basically a social network,” Wills says. “People go there to hang out and to socialise.”

Like Zuckerberg, Disguise is betting big on the metaverse. Since the pandemic, virtual events and gigs have become more popular, with millions of people logging in to attend. Disguise uses software, cameras and screens to create immersive 3D experiences that can be enjoyed in virtual worlds.

The business is far from alone. Hadean is another British company that makes software used to power metaverse experiences and games.

Mimi Keshani, its chief operating officer, says: “We are seeing interest from all kinds of sectors. Virtual workplaces, virtual education, virtual onboarding: we are building those environments for conferences, concerts. The pandemic accelerated all this.”

Businesses are rapidly trying to embrace this change, she says, but development is reminiscent of the internet in the early 2000s: everyone knew they needed a website, but most companies didn’t know what to do with them.

Competing visions

Still, what is clear is that Meta isn’t the only one trying to build the metaverse.

Tim Sweeney, chief executive of Fortnite developer Epic Games, has pitched his $30bn company as a metaverse business too.

Roblox, the video game popular with Gen Z, has been held up as another metaverse-type experience, where players create their own games to be experienced by friends.

Microsoft’s Minecraft is another title that has been given the label. Even Apple is in the picture, with the tech behemoth working on VR goggles. If the Californian tech giant can repeat the success of the iPhone, then VR technology could yet become hugely popular.

The push to develop the metaverse could turn into a technological arms race among Big Tech. In his announcement of Facebook’s rebrand, Zuckerberg showed off all kinds of exotic technologies that could one day form part of the metaverse.

One such innovation is haptic technology - gadgets that can create physical sensations on your skin from your clothes or even entirely virtually. A pair of haptic gloves may make it feel like you are picking up a pen or wielding a sword.

Meta is also working on a gadget called “Project Cambria”, a highly advanced VR headset that can mimic a person’s facial expression on their metaverse avatar. It is developing a pair of augmented reality glasses, called Nazare, that can project virtual images or social media feeds over the real world. Most of these gadgets are not yet ready for the market.

The company has teased other products it believes could be part of the metaverse, such as RayBan sunglasses that cost £299 and can be used to take videos that are posted straight to social media. Zuckerberg has even claimed that machine-brain interfaces and mind-controlled screens will one day be part of the metaverse.

For now, though, most of the games and experiences that fall into the metaverse bucket are disjointed and largely enjoyed through games consoles or PCs.

Video Game Minecraft
Video Game Minecraft

Keshani, of Hadean, says these worlds will one day become “interoperable”, meaning users can jump from one game to another with ease. That may be easier said than done, however, as that future could be blocked by Big Tech companies. “It’s in their interests to control this, that would be disappointing and it would not live up to its promise.”

Zuckerberg has promised Meta will open up its technologies to many developers, although there are fears it will become a “walled garden” that leaves overt power in the hands of the Silicon Valley company.

“There's more questions than answers around the metaverse,” says Dan Ives, a Wall Street technology analyst at Wedbush, “in terms of monetisation, what adoption ultimately is going to be and how many years before investors actually see the returns on the tens of billions of dollars that Meta's going to spend building it”.

There are also questions over how much of Facebook’s rebrand was driven by a desire to reform its image, rather than a real bet on the technology.

Days before Zuckerberg unveiled Meta, Frances Haugen, 37, a former employee at Facebook, appeared on CBS’s 60 Minutes programme.

The former data scientist had shared a vast trove of documents with the US Senate, alleging Facebook knew its social media products were causing political unrest. Among the most damaging claims was the allegation it knew Instagram caused teenage girls to feel unhappy and contributed to self harm.

She had been secretly copying tens of thousands of pages of Facebook internal research. Many of these were leaked to the media or shared with journalists. “The version of Facebook today is tearing societies apart,” she alleged.

Critics of Zuckerberg have claimed the Meta rebrand in October 2021 was little more than a PR stunt to distract from the company’s problems.

“The embarrassing thing is that journalists and policymakers fell for it,” McNamee says. “Conversation shifted to the metaverse, framed as the next big thing, instead of the train wreck it actually is.” A Meta spokesman described the claim as “nonsense”.

Meta and Zuckerberg have insisted that many of Haugen’s claims painted a “false picture” about the company. The company has argued that the data she revealed was mostly research conducted by the company as it tried to combat harms.

But former Facebook insiders believe there is also an element of savvy PR: the Meta relaunch has created a fresh start for the company. One source says: “Mark was impatient with the down and dirty compromises of running a massive social media platform. It is a bit of escapism to do something innovative.”

Not everyone agrees. “They’ve put their money where their mouth is on it,” A second source notes. “Mark had a vision and ultimately was an engineer and a techy.”

So serious is the chief executive’s commitment that he has reportedly told staff to start referring to themselves as “Metamates”.

Whatever the truth, the stakes for Facebook, Meta and Zuckerberg are high. Tens of billions of dollars will need to be sunk into bleeding edge technology without a clear path to making money.

While Facebook and Instagram’s bread and butter has been making billions of dollars on advertising, there is no obvious parallel in the metaverse yet.

As Brian Wieser, an advertising and technology analyst at GroupM, notes: “It is so far out from being a reality.”

“There is no paid media in the conventional sense,” he says, adding that “at some point people will just start re-labelling in-game advertising as metaverse advertising.”

Zuckerberg’s gamble

Meta has identified that it could be left behind if it doesn’t act now, says one former employee. “There is this sense that Meta is solely dominant, but Facebook has always said it nearly died in 2012 due to mobile phones. The next thing could wipe it out. That is the paranoia. Not just the next app, but the next computing paradigm.”

Wills, of Disguise, adds: “There’s hundreds of millions of people attending these [virtual events], so that’s the threat Meta sees. They are saying: ‘Okay, we need to be developing these worlds to capture this younger generation’s attention’.”

A Meta spokesman said: “We have a long way to go before the Metaverse is realised. What Mark shared in 2021 was a statement of intent – an aspirational vision of where we think the entire industry is headed and where we hope things will go.”

Zuckerberg is preparing for the fight of his life. In a recent video posted online, he pulls on his boxing gloves and throws a series of jabs and kicks before tackling Khai Wu, a professional UFC fighter, to the ground.

The video of Zuckerberg sparring, which he says helps him cool off from the rigours of running Meta, comes as he prepares for the company’s Connect conference next month. Zuckerberg will have to show some of the fruits of the last year of research and development into the metaverse.

New versions of Meta’s Quest VR headset and its more advanced “Project Cambria” device could be revealed. But a more fully realised version of Zuckerberg’s vision remains a long way off.

Zuckerberg’s gamble is that the metaverse can reverse the decline of Meta’s other social media apps. He has to convince billions of people to enter the metaverse - and then find a way to dominate the new medium.

Meanwhile, Zuckerberg is looking increasingly isolated. The chief executive frequently works remotely from his $100m villa in Hawaii and some of his closest allies have quit.

Mark Zuckerberg - Aohan/The Mega Agency
Mark Zuckerberg - Aohan/The Mega Agency

The departure of Sandberg, the executive once dubbed Facebook’s “adult in the room”, is the most high profile. But Zuckerberg’s long-serving technology chief Mike Schroepfer also left this year and Adam Mosseri, the boss of Instagram, has relocated to London, along with Clegg, his top PR man and former UK deputy prime minister.

Wall Street analyst Ives says Meta has reached a crucial fork in the road.

“Zuckerberg, despite his divisiveness, has established a platform that is historic in its success,” he adds. “But with that said, will lightning strike twice?”

With rivals circling and critics ridiculing him, Zuckerberg could be forgiven for preferring his escapist virtual world to the real one, where he is so often deluged with bad news.

The Facebook founder’s vision for the metaverse may be his most ambitious idea yet.

If he succeeds, Zuckerberg – who is often ridiculed for resembling a “robot” – will have beat the odds once again and changed the way humans connect with one another. Getting it wrong, however, may show how far Zuckerberg lives from reality after all.