For Mark Zuckerberg and Meta investors, the development of the so-called metaverse will prove to be the ultimate test of patience.
At least, that’s my takeaway after reading two fascinating articles published in the past 24 hours about Horizon Worlds, the signature metaverse under development by Facebook and Instagram’s parent company.
The latest metaverse dispatches, courtesy of The Verge’s Alex Heath and the New York Times’ Kashmir Hill, succinctly distill the enormous risk-reward proposition facing Meta as it pumps billions of dollars into developing the still-nascent technology.
The pieces mostly feed into skepticism about the lack of consumer demand, functionality, and safety features related to the metaverse, loosely defined as an inhabitable digital ecosystem powered by virtual and augmented reality. Yet Hill’s report also provides a glimmer of hope to metaverse optimists—and maybe even a shred of early validation for Zuckerberg’s strategy.
Let’s start with Heath’s article.
In an exclusive report published late Thursday, Heath writes about bleak memos authored last month by the company’s vice president of metaverse, Vishal Shah. In particular, Shah derides Horizon Worlds as a technical mess that distracts from the “strong” core thesis about the metaverse’s potential. Early feedback, Shah wrote, is that “the aggregate weight of papercuts, stability issues, and bugs is making it too hard for our community to experience the magic of Horizon.”
Shah goes on to write that many of Meta’s Horizon Worlds developers “don’t spend that much time” in the virtual environment. He then asks, if Meta employees are lukewarm on the product, “how can we expect our users to love it?”
It’s pretty brutal stuff that corroborates much of the metaverse pessimism. As it stands, Horizon Worlds is largely constructed as an entertainment and social networking tool, rather than a business enterprise product. And if Meta’s own tech wonks aren’t enthused about the technology, what hope is there for the average consumer?
Then there’s Hill’s report.
In her article, Hill documented her journalistic excursion into Horizon Worlds, where she spent dozens of hours flitting between hangouts, games, and conversations with fellow metaverse avatars via her Quest 2 headset.
It was, to say the least, a peculiar experience. There were lots of annoying kids floating around, flouting Horizon Worlds age limits. Some dudes were borderline or outright creepy, accosting her avatar in an aggressive manner. Other avatars were just a little offbeat or aloof.
But Hill also encountered friendly strangers who embraced the mix of virtual social networking and anonymity afforded by Horizon Worlds. She enjoyed Beat Saber, a virtual reality game in which players use a lightsaber to smash blocks to the tune of electronic music. An immersive club featuring professional comedians showed the potential for attending events in the metaverse.
“Putting on the headset was annoying, but once I started chatting in Horizon, I had a good time and was reluctant to leave,” Hill wrote. “I liked meeting people spontaneously without the increasingly heavy-handed algorithmic intervention of traditional social media platforms.”
Ultimately, Hill deemed Horizon Worlds “an early and singular part of what could become a technological shift.” And therein lies the test of patience for Zuckerberg.
As the sun sets on 2022, the metaverse remains little more than a scruffy curiosity—one that’s projected to cost Meta somewhere around $10 billion in operating losses this year. But assuming the technology rounds into shape, there’s a viable case to be made—as Hill does—for the promise of Horizon Worlds.
Will Meta and Wall Street be willing to spend into oblivion to make Horizon Worlds into part of our daily reality? We’ll just have to wait and see.
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You’ve got three weeks. The judge overseeing Twitter’s lawsuit against Elon Musk delayed this month’s scheduled trial and gave the two sides until Oct. 28 to close the Tesla chief’s $44 billion takeover of the company, Bloomberg reported Thursday. Delaware Chancery Judge Kathaleen St. J. McCormick said she will set a trial date for November if Musk and Twitter can’t finalize the deal by the end of the month. Musk offered earlier this week to buy the company at his originally agreed-upon price, an apparent attempt to end litigation tied to him backing out on the deal, though Twitter officials are concerned that the offer is a stalling tactic.
Losing money to make money. TikTok parent ByteDance totaled $7 billion in operating losses last year, with growth-related expenses far outpacing revenues generated by the Chinese company’s hugely popular apps, the Wall Street Journal reported. ByteDance’s operating losses tripled year over year, though the privately held firm reported an operating profit in 2022, according to financial reports obtained by the Journal. The documents do not break down the financial performance of ByteDance’s various apps, including TikTok and several other apps used by hundreds of millions of people in China.
The chips are down. AMD and Samsung reported worse-than-expected preliminary third-quarter results, largely owing to softening semiconductor demand sweeping across the industry, CNBC reported. Shares of AMD sank 12% in midday trading Friday after the chipmaker forecasted quarterly revenue of $5.6 billion, well below its previous midpoint projection of $6.7 billion. Samsung said it expects quarterly operating profit to tumble 32% year over year, its first drop since 2019.
Burning more bridges. Cryptocurrency exchange Binance said Thursday that about $100 million worth of digital assets was stolen from a blockchain network connected to the company. The hack involved about $570 million worth of a Binance crypto token, though company officials said they were able to claw back most of the stolen assets. The theft took place on a cross-chain bridge, which facilitates the transfer of different digital assets across blockchains. An estimated $2 billion has been stolen this year in hacks targeting cross-chain bridges.
FOOD FOR THOUGHT
Sitting this one out. Wealthy crypto bulls are more than willing to plow millions of dollars into digital token startups. Just don’t ask them to sit on corporate boards. The Information reported Friday that prominent crypto investors are shunning offers to take board seats at promising companies, fearful about the unanswered questions surrounding corporate liability in the sector. The concerns pertain to fines and lawsuits stemming from crashes in token value, major blockchain hacks, or mismanagement by aggressive crypto entrepreneurs.
From the article:
Investors’ lawyers are warning that members of token-issuing startup boards could potentially face big regulatory penalties or get sued if other token holders band together in a class-action lawsuit. That’s prompted investors to take various steps to limit their liability, including forming advisory councils to advise founders or limiting their board participation to board observer status, which carries less liability.
Andreessen Horowitz, for one, has not sought out board seats at some token-issuing startups, partially due to the legal risks involved, a person familiar with the matter told The Information. The venture firm does not sit on the board of Uniswap Labs, for example, which raised an $11 million Series A led by Andreessen Horowitz in 2020.
IN CASE YOU MISSED IT
Collisions and close calls: The e-bike boom is getting increasingly dangerous, creating a push for stricter cycling rules, by Yvonne Lau
Tesla investors, beware: Musk has a narrow window to offload more shares to rustle up Twitter cash, and experts are sounding the alarm, by Christiaan Hetzner
Here’s what could throw Elon Musk’s Twitter deal off track, again, by Tom Krisher, Matt O’Brien, and the Associated Press
Tiger Global’s star partner John Curtius has left the firm, far ahead of schedule, by Jessica Mathews
Venture debt is in vogue. A top lender from SVB explains why, by Anne Sraders
Activision Blizzard required a phone number to play its latest game. Players said it discriminated against poor people, Nicholas Gordon
BEFORE YOU GO
Lean, nice, non-fighting machines. Jerry-rigged robots are freaking out some robotics industry bigwigs, who are now pledging to do what they can to limit the potential fallout. Axios reported Thursday that six companies, including sector leader Boston Dynamics, committed to anti-weaponization efforts amid mounting reports of customers modifying robots to cause damage. In an open letter, the six outfits noted “increasing public concern in recent months caused by a small number of people who have visibly publicized their makeshift efforts to weaponize commercially available robots.” In response, the firms pledged they will not weaponize their robots or software, and they will “carefully review our customers’ intended applications to avoid potential weaponization” when possible. You’re officially on notice, amateur MacGyvers.
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