One Year After Facebook Went Meta, It’s Lost Billions

Gif: Surreal Entertainment/YouTube Well, Meta sure is in a bit of a mess. The company formerly known as Facebook rang in its one-year anniversary last week but had very little reason to celebrate. Instead, an unfortunate Q3 earnings report showed that, since its inception last October, the company has lost a gargantuan amount of money in its quest to create “the metaverse”—a hypothetical new realm where it wants all of us to live. How did we end up here, exactly? It all started twelve months ago, when, in the heat of a whistleblower scandal , it looked like Congress might actually crack down on Facebook. Leaked documents—what came to be known as the Facebook Papers —had revealed the company’s harmful impact on young people , its ineptitude with misinformation , and its algorithmic toxicity . As a result, regulation talk was afoot. U.S. Representatives were threatening antitrust action and activists were demanding a break up . Things were looking pretty bad.
It was then that a thunderclap of inspiration must’ve struck over a Menlo Park boardroom somewhere: if things were getting too hot to handle in the real world, why couldn’t Facebook simply invent a new world? Yesss…a new world—this could be the pivot of a lifetime! And hey, the company had changed the rules of the game before—it could definitely innovate its way out of this. Thus, after a meeting I’m sure resembled some watered down version of that “change the conversation” scene from Mad Men, The Facebook Company became “Meta Platforms” and something called the “metaverse” was born. G/O Media may get a commission A gift for literally everybody. Gifts under $20, $10, and even $5. It’s Wish, the catch-all shop for all of the above. What was the metaverse? Zuck and his cohort envisioned a bold digitization of our world—supported by hardware and infrastructure that hadn’t been built yet. It would be fueled by investments in the most emergent and exciting technologies, from virtual reality to augmented reality to holograms to cryptocurrency. As the leader of a push to transform the digital economy, Meta could be a pioneer—an explorer going where no tech firm had gone before. Sure, in a lot of cases, the tech wasn’t quite there yet to actually build this world, but, in the meantime, such shortcomings could be obscured via advertising and animation and hyperbolic rhetoric . All of this could be used to sorta…paint the picture of what the metaverse would look like someday…maybe. Anyway, what did it matter? The point was this: the company had to do something big to make people look at it differently—and this was it.
Yes, Facebook’s transformation into Meta always had to be two things at once: a desperate optics shift and a genuine redirect in business strategy. Maybe the company had always envisioned broader investments in AR/VR but crisis forced it to accelerate? We don’t really know. What we do know is that the company’s massive pivot to a place called the “metaverse” seems to have only caused it more headaches over the past year: namely, billions spent on dubious investments, plummeting profits , worried investors , and a slew of hackneyed digital products that people don’t actually want to use . In a word, Meta’s “first year” has been terrible. Will things get better? That’s unclear. Zuck certainly thinks so, though others have their doubts. We decided to take a look back at the past twelve months to highlight key events involving “the metaverse”—an imagined place that Meta has promised to build but that, as far as we can tell, still doesn’t exist yet. OCTOBER, 2021
Our story begins in the dark days of early October, 2021, when the company known as Facebook is besieged on all sides. Frances Haugen , a former employee turned traitorous whistleblower, has leaked extensive documentation of the company’s sins to the press. The Facebook Papers , first reported by the Wall Street Journal, expose a raft of concerns: antitrust issues, privacy issues, psychological health issues—the list seems endless. Meanwhile, a host of longstanding problems (legal complaints, public distrust, congressional inquiries) compound to place ever greater pressure on what was once the glistening jewel of Silicon Valley.
But then, the pivot occurs. On Oct. 28, after weeks of scandal , Zuck announces that Facebook, which seems to have been making a lot of people angry lately, isn’t actually Facebook anymore. Sure, Facebook, the platform, still exists, but now it is owned by a new company (or, rather…the old company…with a new name) called Meta. This Meta is an exciting place to be, not a bad, scary place like Facebook! Indeed, it’s such a cool place, that it’s going to dedicate itself to exploring a new digital realm you’ll wanna check out, called “the metaverse.”
What is the metaverse? It’s not a new or original concept. In fact, it was originally conceived of by science fiction writers decades ago. In recent years, craven tech companies have been champing at the bit to make it a real thing that they can monetize, and Meta wants to be the leader of the pack. In October, the company releases a stultifying 88-minute video with Zuck to help the public better understand this whole concept/fall asleep instantly: Introducing Meta If you skipped the video, the idea is to put everybody inside a giant digital world that looks like our own. In this world you’ll have an avatar that looks just like you and, because you’ll basically be living in a giant video game, you’ll be able to do whatever you want. How do you actually build the metaverse? If you’re a company like Meta/Facebook, the answer is: shoot fucktons of investment into new AR/VR hardware and technological advancements, while also developing applications and tools that broaden the appeal of VR/AR. Facebook has already been investing in this type of thing for years (its 2014 acquisition of Oculus and the release of subsequent headsets and games show that) but now it’s decided to turbo charge the spending. In some sense, this means that Facebook/Meta is basically trying to turn itself from a social media and messaging company into a social-messaging-and-gaming company, since a majority of VR/AR technologies are currently just an extension of the video game industry. Still, Zuck and fam claim that they’re looking to grow the appeal of these products beyond games—potentially to an infinite degree. That means finding “metaverse” applications for things like business, leisure, education, communication, athletics, and more. The message is basically: We are building the matrix! This is Ready Player One! It is happening rn!
Does the metaverse exist yet? Nope, but it will someday soon! Meta execs tell us: just you wait and see.
NOVEMBER, 2021
Okay! The big pivot into the metaverse has begun. As the company embarks on its long journey towards the imaginary world it wants to create, events in the real world continue to cause it strife. The company also runs into some trouble with its name , discovering that it will have to shell out millions of dollars to various companies that have already licensed the name “Meta” if it wants a branding monopoly on that word.
Meanwhile, a smart-ass animator drops this video lampooning the metaverse and Zuck’s bizarre love of Sweet Baby Ray’s BBQ sauce. It’s funny news but also sorta scary. Like, this doesn’t seem that far fetched, actually: Metaverse VR: Demo Experience DECEMBER, 2021
December sees the launch of a flagship metaverse product, Horizon Worlds . Worlds is a free, virtual reality video game, compatible with Meta’s Oculus Rift and Oculus Quest 2 VR headsets, that is meant as a “ever-expanding social universe.” It’s obvious the company hopes that Worlds will get people thinking about all the possibilities that the metaverse has to offer. However, reviews of the game are decidedly mixed, with PC World calling it “fine,” and Kotaku calling it a “hollow, corporate shell” that does not resemble “any type of social space a human being would willingly want to hang out in.”
Even as Meta trots out Worlds to demonstrate its pivot, controversies from its past persist: the company is forced to admit that, for years, private surveillance firms used Facebook and Instagram to spy on users— some 50,000 people . Meanwhile, members of the Rohingya, an embattled ethnic and religious minority based in Myanmar, sue Meta for $150 billion, alleging that its websites helped the government’s genocidal campaign against them. JANUARY, 2022
Meta has a quiet month, except for its weird unveiling of a supercomputer that it claims will help build the metaverse—though it’s vague on the details as to “how.” Meanwhile, Walmart claims it, too, wants to get in on the metaverse and says its launching an NFT collection that will somehow qualify. This awkward piling-on from the world’s most horrid mega-retailer somehow makes the whole enterprise seem lamer by association. FEBRUARY, 2022
In an unfortunate turn of events, Zuck reveals to employees that they must now refer to each other as “Metamates,” an unequivocally dumb name. Meanwhile, a dire warning from the company of weaker-than-expected revenue growth in Q1 leads to a stock plummet—and Zuck’s net worth, which is tied to the company’s value, loses $30 billion in a single day. People start talking about how doomed Meta might be. Further rain clouds gather as influential Facebook board member and abject comic book villain Peter Thiel announces he is stepping down —ostensibly so he can continue his plan for world domination via other business ventures. The Washington Post darkly suggests that Horizon Worlds could be used by groomers and sexual predators, surprising no one. To top things off, it is revealed that Apple’s proposed privacy changes will cost Meta $10 billion in lost advertising revenue.
MARCH, 2022
Not long after its big stock drop, the grim news breaks that Meta will no longer do employees’ laundry for them. Other onsite perks, like endless free steak dinners (apparently a real thing), will also be curtailed. Meanwhile, a slow churn of creepy advertisements continue to goad the public into believing that, despite their better instincts, they really do want to live in a digital netherworld developed by this guy . Skeptics are compelled to put aside reservations and just submit already. Still, the optics aren’t great. This ad, originally released in November, has all the nightmarish delirium of an acid trip gone wrong: The Tiger & The Buffalo APRIL, 2022
Q1 isn’t quite as bad as everybody was expecting but it’s not great. Meta misses its quarterly earnings projection but not by much (give or take a billion) and adds some users. But, unfortunately, the report also shows that Facebook…er, I mean Meta, sorry…has lost a lot of money over the past few years in VR investments, which are supposed to be the backbone of “the metaverse.” They aren’t doing the company any favors: Meta has apparently lost $20 billion to such investments since 2020. Reality Labs, Meta’s VR unit, is found to have operated in Q1 at a loss of nearly $3 billion. Zuck says this kind of loss is all part of the plan and to just hang tight while they reinvent the wheel. In the meantime, the company continues to generate a series of weird products nobody asked for: Behold, Zuck Bucks ! Does the metaverse exist yet? Nope. MAY, 2022
After Q1’s middling results, the company goes on to release a video preview of Zuck wearing its upcoming VR headset, dubbed Project Cambria (real name: Quest Pro). However, the vid pixelates the headset like it’s someone’s junk on Zuck’s head instead of just some plastic. The video shows Zuck interacting with a cartoon animal that looks like a 3D neopet. It’s unclear what the pixels are all about or whether you have to clean up the cartoon animals’ cartoon poop. JUNE, 2022
As the great adventure continues, most other news in June is overshadowed by the departure of original girlboss Sheryl Sandberg, who quits the company on June 1. Zuck calls it the “end of an era.” Critics note Sandberg’s mixed legacy , as well as the fact that she’s sorta leaving the company with its pants down. With Thiel out and now Sandberg, legacy figures seem to be dropping like flies. During the same month, Meta introduces a store where you can customize your metaverse avatars. It also delays the release of the AR-fueled Project Nazare , what were supposed to be its first metaverse glasses. Instead, it launches an integration that lets you pretend like you’re playing a guitar. Distressingly, a report shows that Meta’s imaginary digital landscapes in Horizon Worlds are already pushing users to exhibit really bad behavior —like simulating sexual assault. Isn’t this the stuff of Westworld?
JULY, 2022
Q2 is when things start to get really hairy: the company’s earnings report reveals slowed growth and its first ever revenue decline . Not great. As critics worry that Meta is on a “ Yahoo-like cliff ,” the company announces a 30 percent hiring slash and starts hunting for lackluster employees to fire. Not long afterward, Meta is sued , yet again, by another company that claims it stole its name. Meanwhile, old problems die hard and the apparitional specter of the Cambridge Analytica scandal rears its data-grubbing head : Zuck and Sandberg will have to testify to Congress about it. During this period, the company is still trying, ever so desperately, to become TikTok (hope springs eternal) via an FB app makeover that looks suspiciously like its competitor.
Does the metaverse exist yet? Still nope. AUGUST, 2022
Amidst the scorching heat of summer Zuck whips out his own metaverse avatar and wags it in the world’s face. It is—as one Kotaku writer put it —“boring, drab, generic, and really shitty.” Other apt descriptions include: “ international laughingstock ,” “ so stupid ,” and “ accurate compared to the real Zuck: the same dead eyes, the same delicate skin .” In short: billions of dollars of investment have made Zuck’s meta-self look like a Sims character circa 2000. What gives? Is this really the sexy alternate reality we’re all supposed to be excited about? Zuckerberg metaverse slammed for ugly graphics That same month, the company also releases Meta Horizon Teams , an interactive “space” that’s supposed to help businesspeople work better together. According to Meta, if you strap one of its Meta Quest 2s on your head ($399.99), you can use it talk to other remote co-workers and also do stuff like write on a digital white board. Unfortunately, it’s unclear why this is better (read: cheaper/easier) than just using Zoom?
SEPTEMBER, 2022
Meta acquires Lofelt , a haptics startup based in Berlin. Haptic tech is the field of replicating the illusion of tactile sensations—otherwise known as touch. Meta clearly hopes that this investment will someday pay off by developing products that horrifyingly make you feel like you’re in the actual matrix. Meanwhile, amidst worsening economic headwinds, a slew of scandals nip at the tech giant’s heels: Instagram is fined $400 million for its mishandling of children’s data in Europe; the company’s own report says that it harmed Palestinian users’ civil rights; Amnesty International accuses the tech giant of “substantially contributing” to the ethnic cleansing of the Rohyinga in Myanmar.
OCTOBER, 2022
Now we arrive in the present—a most unfortunate place to be if you’re Meta. The Q3 earnings report is scheduled for the end of the month and, in what seems like a push to head off any bad news, Meta launches a bunch of new products. The Quest Pro (remember the pixelated thing on Zuck’s head?) is finally released, boasting some of the most advanced tech to date. Some critics like it but it’s also a whopping $1500, making it outside the price range of most folks. Oculus also pushes out a VR multi-player app called Wooorld that lets you pretend you’re in poorly animated versions of famous cities. Despite new releases, bad news can’t be avoided. In the last week of October, the Q3 report reveals that this is truly the darkest timeline and the company has lost some $700 billion in market value during the past year—its stock plummeting 67 percent. Zuck, himself, has lost about $100 billion . The report shows back-to-back quarterly declines and experts say more is expected in Q4. It certainly looks like “the metaverse” is mostly a place where money evaporates into thin air. News outlets begin to question whether the glacier pale CEO will ever listen to reason or simply run his gajillion dollar company into the ground like a failed kamikaze into a wheat field.
But Zuck urges patience . The metaverse is cominggggggg, can’t you see? As proof, during the same month, Meta shows off a video at a company event where it boasts that its avatars—which, until this time, have just been disembodied torsos—will soon (?) come equipped with legs and feet. That’s exciting (?) but it soon turns out that the video is a sham: a follow-up by a news outlet reveals that, while the video seemed to be presented as if it were a live VR demo, it actually “featured animations created from motion capture.” So, basically, Meta is out hundreds of billions of dollars and can’t even muster avatars legs…Does the metaverse exist yet? Uh…