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Mark Zuckerberg’s big bet on virtual worlds was supposed to help his company dominate the next era of computing. He was so sure of his vision that in 2021 he changed the company’s name from Facebook to Meta, and adopted the ticker symbol META as a nod to the metaverse he believes we will all soon inhabit. Barely a year later, Zuckerberg’s bet looks set to bring about the company’s downfall.

I’ve covered tech earnings for 12 years but can’t recall a horror show like what took place on Wednesday when Meta announced third-quarter results. While the company is still making a profit, the market retched at the news Meta will lose more than $10 billion this year alone on Reality Labs—the unit devoted to VR and the metaverse—and that it plans to double down and spend even more on the unit in 2023. Meta lost 25% of its value and, after years as one of the five most valuable companies in the world, is now barely among the top 30.

Analysts didn’t mince words. As “IBM symbolizes dinosaur tech 1.0…so Meta faces the risk of being the next-generation fossil,” said one, while another tech watcher quipped “Facebook stock price has no legs to stand on”—a jab at the company’s widely mocked legless avatars.

Meanwhile, a tech columnist declared that “Mark Zuckerberg is going to kill his company,” and predicted Meta will introduce even more annoying advertising to its core products, Facebook and Instagram, in order to keep paying for the CEO’s metaverse ambitions.

All of this also raises the question of whether the much-hyped idea of the metaverse itself is doomed to fail. If a tech giant like Facebook can’t figure out the platform even after investing tens of billions of dollars, how is a blockchain startup supposed to solve it?

My view is that the problem is less the metaverse itself (though the tech has a long way to go) but rather Zuckerberg’s vision. Instead of building a platform based around the decentralized ideals of Web3, the Facebook CEO set out to build a walled garden where he could have control over every element of the experience. In Zuckerberg’s conception of the metaverse, his company is a gatekeeper and tax collector—the same mentality that informs the original Facebook, and one that consumers are increasingly rejecting. His decision to double down on that vision will only accelerate his company’s decline.

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

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