Whenever I read anything about Meta’s “metaverse” efforts, I get a flashback to the day in late 2021 when Mark Zuckerberg announced his company was betting the farm on the concept. It’s not the CEO’s words that I recall, but those of longstanding metaverse champion and at-the-time Meta technologist John Carmack, who was a key figure charged with actually building the thing: “I want it to exist, but I have pretty good reasons to believe that setting out to build the metaverse is not actually the best way to wind up with the metaverse.”
Judging by a Wall Street Journal report this morning, Carmack—who left Meta at the end of last year, complaining about internal bureaucracy and complacency—won’t be eating those words anytime soon. It seems Meta now wants to boost interest in its Horizon Worlds metaverse app by targeting teens and young adults who are happily spending time in other virtual-reality apps on Meta’s hit Quest 2 headset, but not so much in the supposed flagship experience.
Here’s Horizon chief Gabriel Aul, in an internal memo reviewed by the Journal: “Today our competitors are doing a much better job meeting the unique needs of these cohorts. For Horizon to succeed we need to ensure that we serve this cohort first and foremost.”
The article paints a grim picture of Horizon’s uptake thus far. The weekly retention rate is just 11%. Four months ago—around a year after Meta’s big strategic shift—the app had fewer than 200,000 monthly active users, and Meta had just been forced to revise its target from 500,000 to 280,000 users. According to this latest report, the company’s target for the first half of this year is back up to 500,000 monthly active users, with a goal of a full million by the end of the year. The current reality, though, is “just above 200,000.”
For context, that’s roughly a thousandth of the monthly userbase for Roblox, whose metaverse-ish platform is wildly popular with kids. (Though in fairness, Roblox offers a cross-platform experience that Horizon does not, yet.) So, time for Meta to win over the same crowd? Perhaps—but if precedent is anything to go by, that’s a tall order.
Facebook, as the firm was known before its re-orientation, doesn’t exactly have youth in its DNA. It may have started out as a service for college-goers, but within a decade it was established as a platform for older people. When it bought Instagram in 2012—remember when $1 billion seemed like a lot of money?—the image-sharing platform’s younger demographic was obviously a key driver. Since then, Facebook/Meta has repeatedly tried to fend off competition from youth-friendly rivals like Snapchat and TikTok by cloning their features. Acquiring and copying may have generally worked out in the past, but Meta is now committed to a path of actual innovation.
Aul’s analysis of the problem may not be wrong—it ain’t Gen-Xers like me who would be the first serious adopters of virtual-reality technology—but his prescription also has risky elements. Like other social media companies, Meta has long been attacked for exposing young people to harmful content and negatively affecting their mental health. Lowering Horizon Worlds’ minimum age from 18 to 13, as Meta is reportedly set to do as soon as next month, will inevitably expose the company to further criticism—assuming the kids actually show up.And for that to happen, Meta needs to somehow convince them that the company behind terminally uncool Facebook has built somewhere worth spending time in. I don’t know what it would take to reverse the negative buzz that’s swallowing up Zuckerberg’s extraordinarily expensive metaverse vision, but Meta has left itself with no choice but to try.
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David Meyer
Data Sheet’s daily news section was written and curated by Andrea Guzman.
NEWSWORTHY
Just 49% more to go. Elon Musk previously said he wants subscriptions to account for 50% of Twitter’s total revenue. But reporting by The Information reveals that the social platform had about 290,000 global subscriptions as of mid-January, implying annual revenue of approximately $28 million, or just 1% of Twitter’s annual revenue. The subscription numbers are paltry compared to subscription services offered by social media giants like Snapchat, which has more than 2 million people using Snapchat+.
DEI comes to gaming. At least one playable character was a person of color, a woman, or LGBTQ+ in 84% of the console games by Activision Blizzard, Electronic Arts, Microsoft, Nintendo, Sony, and Take-Two in 2022, up 4 percentage points from games released in 2021. The data from a new S&P analysis comes as gamers celebrate the representation provided through a queer romance in a recent episode of HBO’s The Last of Us, based on a game developed by Naughty Dog. But the industry still has a ways to go. LGBTQ+ people had the lowest representation in the games S&P analyzed at just six titles in 2022.
More layoffs. Dell is axing about 5% of the company’s staff, which is more than 6,600 people. A spokesperson told Fortune that since June, the company has paused external hiring and reduced spending, but that the decision to lay off workers comes after other cost-cutting measures didn’t do enough. Dell joins a chorus of other layoff announcements early this year, and it’s adding up; in late January, the number of tech workers who had been laid off was nearing 70,000—approaching the number of tech layoffs in the early days of the pandemic.
Speaking of Dell. CEO Michael Dell talked to The New Yorker about how IBM, Texas Instruments, Motorola, and others set the stage for him to grow a tech company in Austin. Four decades after starting the computer giant out of his college dorm, the Texas capital now has Oracle, Tesla, and others squeezing into a space once known for its live music scene and affordability. To explore the city’s identity crisis, the magazine talked to the founders of 23andMe and Palantir who have made the move to Austin as well as historians and local musicians.
FOOD FOR THOUGHT
New A.I. bots just dropped. In a few weeks, the general public will meet Bard and Ernie, Alphabet and China-based Baidu’s attempt to rival ChatGPT. The two will reportedly integrate the bot as part of their search engines, using generative A.I. to provide people with written answers. Baidu is staking its comeback on the bot.
From the article:
Baidu is investing heavily in artificial intelligence to help regain ground lost to its competitors. The company was one of China’s first successful internet companies, offering search to Chinese users (within the confines of Chinese internet censorship). Yet the company failed to capitalize on the rise of smartphones, losing ground in advertising and video to companies like Alibaba, Tencent and Bytedance.
IN CASE YOU MISSED IT
What if Shakespeare, Elvis or Elon Musk delivered the State of the Union address? ChatGPT provides some idea, by Calvin Woodward and Josh Boak
‘Big Short’ hedge funder says he thinks we’re headed for a ‘run-of-the-mill’ recession—but the bigger ‘paradigm shift’ is really on his mind, by Will Daniel
Binance suspends bank transfers of U.S. dollars, by Leo Schwartz
Major trading firm lifts ban on side hustles—opening the door for employees to become YouTubers or startup founders, by Chloe Taylor
‘Hush trips’ are the next big trend your worker won’t tell you about. But that doesn’t mean bosses should crack down, by Chloe Berger
An ex-Twitter employee says the company’s mission to make people’s lives better ‘went to garbage’ after Elon Musk took over, by Prarthana Prakash
BEFORE YOU GO
Keep Duo Happy! More than 50 million people work on 1 billion exercises a day on Duolingo, say three of the creators behind its “Birdbrain” A.I. system. The group wrote about the second version that launched in May 2022 to help with the personalization of lessons. As they grow, language learning apps have turned some of their focus towards Americans, with Duolingo noting that the U.S. ranks far behind other nations in foreign language proficiency. For Babbel, another language-learning platform, the U.S. market is quickly becoming its fastest-growing and has overtaken the company’s home market of Germany as one of Babbel’s strongest markets. Still, there may be no alternative to a class. “We don’t believe that you can replace a great teacher with an app, but we do hope to get better at emulating some of their qualities,” the Duo staffers write.
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