Facebook, Beware: The Metaverse Is Flat

In a few weeks’ time, Mark Zuckerberg will announce a new virtual reality headset from Meta Platforms Inc. Embarrassingly, we already know what it will look like. A video of the purported device has been doing the rounds online after someone found one in a hotel room. Yet none of that should matter because whizzy VR headsets are becoming too much of a distraction, and aren’t that integral to the early growth of the so-called metaverse, a 3D version of the internet that many see as its next chapter. It turns out flat screens are doing the job just fine.

While Facebook has sold about 14 million VR headsets to date, millions more have visited the metaverse through regular 2D screens like the one you’re looking at right now, via apps like Roblox and Epic Games Inc.’s Fortnite. The trend is likely to continue for several years yet as VR headsets take time to slim down in size and price.

That puts Zuckerberg in an awkward position. He wants you to buy Meta’s headset, known as the Quest, because that gives him greater control over whatever metaverse marketplace he builds down the line. And the reason is clear: For years he’s been beholden to the rules of app gatekeepers Alphabet Inc.’s Google and Apple Inc., paying their fees and following edicts such as the App Tracking Transparency prompt that will knock about $14 million off Facebook’s ad sales this year.

It would be a painful, almost unthinkable step for Facebook to make its metaverse platform Horizon Worlds available on app stores. But perhaps there is another way. Facebook could allow people to visit the platform via a simple browser.

Google’s Stadia uses a service called cloud-streaming that lets people play large video games via Chrome. It’s an expensive process, requiring powerful servers, but it could help Facebook circumvent Apple and Google while drumming up a flood of curious new users. Meta’s technology chief Andrew Bosworth hinted on Twitter earlier this year that a web-based version was in the cards, but a company spokeswoman declined to provide further details.

“It’d be a 3D version of Facebook that looks like a game, but you’d browse it from your desktop,” said Sam Huber, CEO of metaverse property startup LandVault. “It could become the most popular game in the world.”

Even modest popularity would reassure investors who are likely to balk at how slowly the company’s headset customers are growing: A mere 300,000 people have visited Horizon Worlds since it launched last October. You can only access the platform via a Quest 2 headset.

“Facebook seems to be operating from a sunk cost fallacy,” said Wagner James Au, an author and blogger who has covered the metaverse for more than a decade. “There’s no data to support VR headsets as being the mass market device.”

In fact, flat versions of the metaverse are far more popular than 3D ones. About three-quarters of Roblox’s 52 million daily visitors are on a phone, while the vast majority of people using Microsoft Corp.’s Minecraft or Fortnite are on a desktop computer or mobile.

Several metaverse companies have also pivoted to flat. Decentraland, for instance, a virtual world for trading crypto assets, was marketed as a “virtual reality platform” when it launched its initial coin offering in 2017. Yet all its users have since been visiting via a desktop or browser, the company says.

VRChat, a platform for socializing with other avatars, was first released as an app for Oculus headsets in 2014. Three years later it produced a desktop version, and was able to attract millions more users.

“The issue is price,” said Artur Sychov, the founder of metaverse startup Somnium Space, whose users mostly visit on a browser. Meta’s Quest 2 costs about $400, while other rival headsets can exceed $800.

Going into a virtual world on a screen is actually a decent proxy for “real” VR and certainly more engaging than a regular video call, as I discovered when Sychov took me on a tour of the Somnium universe during our Zoom meeting. Since I wasn’t technically with him as an avatar, Sychov held a virtual tablet in front of him with a “camera” that let me follow his movements around the space.

Watching him point to art in a virtual gallery and moving through colorful forests, even on my laptop screen, was enough to help me imagine myself being there.

Until now, Meta’s marketing has focused on the immersive benefits of VR headsets, creating the feeling that you’re really with work colleagues or inside a fitness class. But that misses the true selling point of the metaverse — incentives to create new experiences — and you don’t need a VR headset for that.

To lure more people into its virtual platforms, Meta needs to focus less on building cutting-edge headsets, and more on emulating metaverse pioneers like Roblox, Fortnite and Minecraft. Almost a quarter of Roblox’s own users have created millions of games for the platform, producing a marketplace for commerce as well as fun. Nearly all its content is user-generated, just like TikTok or YouTube, and that is a big part of its attraction.

Zuckerberg similarly must turn his metaverse into a place where creators can thrive. Facebook’s current push to test tools for creators feels late, given how far ahead the other pioneers are.

Concentrating too much on immersive tech is putting the cart before the horse. Meta needs to make its metaverse both accessible and an attractive place for creators. Going “flat” would be a good start.

Bloomberg