What Is the Metaverse?

I realize this is a click-baity subject, but I couldn’t help myself. There’s so much confusion online about VR, the “metaverse,” Facebook’s pivot, and the cringeworthy marketing content (which you can skip unless you love buzzwords and egregious use of terms like “collaboration” and “AI”). The whole thing is oddly reminiscent of an episode of Star Trek.

Let me preface by saying that I’ve never thought of VR as more than a niche technology, so I’m not particularly bullish on its mass adoption potential.

Regardless of how you feel about FacebookMeta’s work, I think Zuckerberg is lumping a bunch of different things under the same umbrella, hoping they’ll somehow synergize into something profitable as Facebook and Instagram’s growth plateaus. According to Meta’s latest financial reports, their core platforms are indeed showing signs of saturation in key markets. The “throw tons of stuff at the wall and see what sticks” strategy isn’t terrible—it’s essentially how the venture capital ecosystem operates.

The core concepts behind the metaverse, as near as I can tell, are:

• VR: Virtual reality—immersive digital environments typically experienced through stereoscopic headsets that project 3D images directly into your eyes. Research from Statista shows VR headset shipments are growing but remain relatively modest compared to other computing platforms.

• AR: Augmented reality—taking a real-world feed (such as video from a camera) and overlaying digital information, renderings, sounds, etc. The most successful AR application to date was arguably Pokémon GO, which generated over $6 billion in revenue without requiring specialized hardware.

There might be more to it, but watching their promotional videos reveals mostly speculative technology that feels more like “flying cars”—interesting concepts that might appear in sci-fi movies but aren’t practically useful yet.

Meta also appears to be jumping on the videoconferencing trend, betting that people will continue avoiding in-person contact, particularly in workplaces. This makes some sense for remote workers, but I’m unconvinced that VR headsets improve upon webcams. The Horizon Workrooms demos look awkward and uncomfortable to me—legless avatars sitting around virtual tables doesn’t seem like a compelling upgrade from Zoom.

Regarding VR hardware, we should acknowledge that the Quest products are actually quite good for what they are. The Quest 2 has sold an estimated 14.8 million units as of early 2022, impressive but still a niche compared to smartphones or gaming consoles. My hunch is that VR will remain primarily for gamers, plus perhaps some specialized applications, for several reasons:

• VR headsets remain awkward, clunky, and far from fashionable. Despite Meta’s investment in making slimmer headsets, physics constraints mean they’ll likely never be as casual as glasses.

• The VR experience can be overwhelmingly intense, with studies showing that 40-70% of users experience some form of “cybersickness”—nausea, disorientation, or eye strain—due to the disconnect between visual input and physical sensation.

• Real-world interaction offers multisensory richness that digital spaces can’t replicate. Research from Stanford’s Virtual Human Interaction Lab demonstrates that while VR can be compelling, it still falls short on crucial dimensions of human connection.

• Pushing more people into virtual spaces rather than real-life community might exacerbate existing social isolation problems, which were already reaching epidemic levels before the pandemic.

Prior Art #

People have been trying versions of this for a long time. The pieces are better now, especially video conferencing, but that still doesn’t make VR meetings sound appealing to me.

Let’s examine the most famous precedent that resembles what Zuckerberg is pitching: Second Life.

For those unfamiliar with Second Life, it’s a virtual world where users create avatars and explore digital spaces while interacting with others. At its peak around 2007, it boasted over a million active users and significant media attention. Companies like IBM, Dell, and Reuters established virtual presences, with some investing millions in their Second Life operations.

I tried Second Life years ago but couldn’t discern its purpose beyond novelty. It felt pointless compared to goal-oriented video games. Second Life was intentionally designed as a non-game with no objectives, which might explain why it never truly took off despite early hype.

What’s fascinating is that Second Life still exists and reportedly has around 200,000 daily active users even in 2022. That’s a sustainable niche, but hardly the revolutionary platform once predicted. Its economy generates meaningful revenue, but it never transformed how most people use the internet.

Games can be fun whether digital or physical—cribbage, Settlers of Catan, or Call of Duty. They’re enjoyable primarily because they’re games played with friends, not necessarily because they’re digital. The metaverse seems to misunderstand this fundamental distinction.

Alternative Hypothesis #

I wonder if the metaverse pivot is partly a strategic distraction from Facebook’s negative press regarding election interference, misinformation, and the Facebook Papers. If I had to assess whether this is about avoiding scrutiny versus finding new revenue sources, I’d say it’s roughly 50/50. Facebook remains incredibly profitable—in Q2 2022, they reported over $28 billion in revenue despite market challenges. If Zuckerberg’s metaverse ambitions divert attention from controversies while the ad business continues generating billions, investors might tolerate the experimental spending.

Meta employs exceptional talent, often paying premiums over industry standards. Could they know something skeptics don’t? Perhaps. But I’m sure some people are also just collecting paychecks while the company chases its founder’s vision.

Facebook has always been fundamentally an advertising company. Do I want VR ads? Not particularly—that gives me Black Mirror and Idiocracy vibes. Can Meta reimagine their business model beyond advertising for this new platform? Maybe, but I’m skeptical. Their recent Reality Labs division lost $10.2 billion in 2021 pursuing metaverse technology, showing Zuckerberg’s willingness to invest heavily in this vision.

One final note: I wouldn’t bet against Meta. Regardless of the true motivations behind the VR push, their advertising business will likely continue generating enormous profits for years to come, funding these experimental forays into virtual worlds. My guess is the metaverse stays an expensive side project unless they stumble into something much more practical than what they’ve shown so far.