Metaverse woes cloud lofty aspirations | Commentary

The aspirations of those awaiting the arrival of a digital universe filled with virtual commerce and immersive experiences are getting a reality check.

Meta, formally Facebook, has undertaken record layoffs in the corporation’s history, with more than 20,000 let go by the social media and technology giant. Claimed as one of the many suffering under the “tech apocalypse,” the ramifications of a failed business strategy during and after the global health crisis and the failure of the company’s aspirations to define the virtual reality boom have come home to haunt the corporation.

In news from various sources, many of whom are previous staffers cut from the corporation, it was revealed first that, with the restructuring of the business, the plan for a global rollout of physical Meta Stores has been drastically redacted — if not completely shelved.

After opening its first store in May 2022 in California, grandiose plans for the brand had been revealed, which had incorporated a VR showroom to try out curated experiences on the Meta Quest range of headsets. At the time of launch, the concept was questioned as being a branded VR arcade that also sold Meta products, but soon revealed itself to be a badly conceived competitor to Apple and Microsoft stores.

The first store has seen poor customer interest, even located on a Meta campus. Now this plan seems to have been abandoned, with only one store opened.

Meta Quest Pro discontinued

Regarding another victim of poor reaction and confused business planning, it was revealed by several media services that the Meta Quest Pro headset, launched in October 2022, was to be discontinued. Rumors suggested that only 50,000 units had been sold of this MR/VR headset, aimed at enterprise and prosumer utilization.

Sources close to the Chinese fabrication company stated that no further manufacturing of the system would be taking place, with Meta clearing remaining stocks — at which point the platform will be discontinued.

The plans rumored for a Quest Pro 2 are also under review for possible shelving at this point.

Attempts by Meta executives to place a positive spin on the situation could not cover up the reality that the Quest Pro had proven unable to achieve any of the milestones set for it, and that public reaction, even after dropping the system’s exorbitant price, had failed to find support — both in sales and content creation.

The discontinuation of the Pro will also place strains on the partnership with Microsoft, which proposed to support the MR platform after discontinuing its own Hololens platform.

Where does VR stand?

Suffering both layoffs and restructuring, many industry observers wonder on the plight of the ambitious Metaverse strategy as launched by the corporation’s founder when the company changed its name to Meta in 2021, having seen a failure to attract users to the Meta’s Horizon Worlds social VR space and internal reporting on an inability to achieve retention of VR customers on its hardware.

The hoped for monthly active users of 500,000 had achieved only 200,000 by the end of 2022. It was revealed that an in-house studio has been funded to make first-party VR games for the space to try and draw users as the space prepares to reboot and include a new mobile app.

The corporation is hoping that its social space can compete with the likes of Fortnite and Roblox — the new platform is creating Meta Horizon interpretations of these popular experiences exclusively for its space, looking to attract the younger audience following the lessening of age restrictions on their platform.

Plans to be announced soon

All these expensive measures are placing pressure on the operation’s $100 billion strategy. All seems to rest on September’s Meta Connect conference where the full release plans of the Quest 3 standalone VR platform will be revealed, along with new game titles for the platform.

The reception to the release of this ninth VR headset since the corporation’s VR operation was acquired from Oculus VR in 2014 seems to hold the fate of the division in its hands. The importance of this event is seen with it reverting to a live stage gathering with a limited audience attendance and demonstrations, hoping to prove the Metaverse is coming to life. The event will be livestreamed.

The reality of the situation, however, at Meta’s AR and VR division, Meta Reality Labs, established following the 2014 acquisition, was brought home following a report on CNBC that revealed the operation had lost an eye-watering $21 billion since the beginning of 2022. It was reported that $3.7 billion of this was operating loss.

This comes as Meta announced new pricing for subscription to its VR content and the restructuring of the pricing of the VR headsets. Also, sources suggested that plans to launch a new AR glasses system have been put on indefinite hold and that more layoffs from the Meta Reality Labs operation are expected to come after the launch of the next hardware in October, the Meta Quest 3.

Virtual positioning

The need to secure control of the usage of hardware within the commercial entertainment landscape has never been stronger. In a sign of the value and opportunity of this sector, VR headset manufacturers will increase the restrictions and terms of usage to ensure they control deployment of their brands.

Valve steps forward

This was best illustrated from Valve, the game developer and operator of the Steam game digital distribution service, also known for its early work in defining and deploying VR. The company is behind the VR Room platform that ushered in development of this phase of VR leading to the development of the HTC VIVE Pro headset series, its own Valve Index headset and the popularity of the SteamVR platform.

Sources revealed that Valve made changes to its terms of service that now restrict the use of its open runtime code, blocking its usage or manipulation, forcing certain VR amusement platforms to remove the code or face censure.

This seemed to block separate licenses and the move complicated support for Valve, especially as it transfers more responsibility to HTC regarding support involvement with the VIVE and Lighthouse range.

At least one VR amusement platform was known to be impacted by this development, and the manufacturers are evaluating their position.

Meta alters API

Meta’s Reality Labs division also made changes to its application programming interface.

Meta updated its platform integrity attestation API, allowing for what was claimed to ensure security of its headsets against piracy and external misuse, along with protecting financial and enterprise app data. This protection also included the closing of the door on the misuse of their technology and brand in applications not supported by the terms of usage.

Meta has been known to not be as supportive as some regarding the application of VR arcades and LBE deployment of its technology, although the company was known to have supported the failed TheVoid free-roam VR experience.

Several developers over the years have fallen foul of initially expecting Meta support in their VR arcade projects, only to be blocked from using the consumer hardware.

And with the Meta Quest 2 and soon to be released, the Quest 3 headsets’ further commercial entertainment interest has been voiced and demonstrated. However, current updates to the usage of the API and hardware are expected once again to firmly close this avenue to operators.

Meta also drew ire from the VR community with the shuttering of the servers and closing of Echo VR, the popular free-to-play multiplayer VR zero gravity game arena launched in 2017.

The game was one of the few multi-player success stories on the Quest platform, and it took many by surprise that Meta would shutter this particular game.

In statements on social media, Meta’s CTO claimed the reasoning behind this move was that the game player base had fallen into the low 10,000s and was not offering a return on investment to maintain the resources to run it.

With the servers shut down at the beginning of August, a very vocal player base (some who had even funded a plane to fly over Meta headquarters demanding a reprieve on the decision) vented their anger across social media.

Sources suggested that Meta, which owns the game developer Ready at Dawn Studios, is working on a new game, borrowing from the original that will be siloed within “Horizon Worlds” to salvage the failing VR space. These rumors have yet to be confirmed.

Closing the door on the usage of Meta Quest hardware in VR arcades has been rumored to be linked to internal legal advice once proffered that felt supporting independent operators would open the corporation up to claims of possible liability. It was never confirmed or refuted by Meta if this was the core reason for its blocking of enterprise entertainment usage.

Others pointed to a need to wholly control its ecosystem. This suggestion was lent weight when it was announced in 2022 that Meta would be entering the retail scene with a chain of physical Meta Store venues, as mentioned previously. The first store has a dedicated VR showroom, reminiscent of many VR arcades.

Sadly, the lessons learned in the LBE industry of how to operate a successful VR arcade were lost on the team behind the Meta Store concept, and the project is reported as now being abandoned, just under nine months since opening.

The Metaverse, meanwhile, remains uncharted waters for many.

(Editor’s note: Extracts from this blog are from recent coverage in The Stinger Report, published by Spider Entertainment and its director, Kevin Williams, the leading interactive out-of-home entertainment news service covering the immersive frontier and beyond.)