Facebook cofounder Mark Zuckerberg announced about a year ago that he was betting his company’s future on the metaverse. So far, it’s looking like a bad bet.
Zuckerberg renamed the company he leads Meta to emphasize the transformation, but the main metaverse that the social media giant is offering to consumers, Horizon Worlds, has fallen short of expectations. Internal documents show the company is grappling with glitchy technology and bored users in its largely unrealized virtual world, according to the Wall Street Journal, with the following among the key findings:
- Horizon’s user base has steadily declined since spring. Most users don’t return after the first month.
- Meta wants users to create their own worlds using Horizon’s tools. Less than 1% are doing so.
- Most of the worlds built by creators are never visited. Under 10% are visited by at least 50 people. “An empty world is a sad world,” noted one internal document.
- A tip feature to reward creators for their efforts has generated payouts of under $500 globally. Cumulatively, Horizon’s worlds have brought in only about $10,000 in “In-World Payments.”
- Retention rates for the Quest virtual reality headsets—sold by Meta to access Horizons—have dropped in each of the past three years.
- Meta’s goal of reaching 500,000 monthly active users by year’s end looks unlikely. The company recently changed the goal to 280,000, from less than 200,000 now.
Meta has put Horizons on a “quality lockdown”—no launches of new features—to address bugs and complaints, as The Verge reported.
Meanwhile the company has been struggling, faced with competition from TikTok and privacy changes to Apple’s iPhone that are choking ad revenue. As Meta invests billions in the metaverse, its shares have fallen more than 60% in the past year, and last month it froze hiring, reduced budgets, and restructured teams to reduce costs.
Of course, the company remains a juggernaut and has insisted all along that building and refining its metaverse offerings will take years.
And it’s eyeing more than just the consumer side.
Earlier this month, the firm introduced a $1,500 Meta Quest Pro headset for businesses. Microsoft, for one, said it’s partnering with Meta to make versions of its office productivity software that customers can use while wearing the high-end headset. Accenture CEO Julie Sweet and others also expressed their excitement.
But just how much time people, whether at home or work, are willing to spend with a headset strapped to their face remains to be seen. One thing is certain: However it plays out in the long run, Zuckerberg’s metaverse gamble will go down in the history books.
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