Well, there goes the metaverse!

Meta’s big bet on virtual reality ended last week, when the company reportedly quit about 1,500 employees from its Reality Labs division – about 10% of its employees – and closing several VR game studios, according to The Wall Street Journal. It’s a big change for a company that, four years ago, put all of its knowledge into ideas.

Few will miss it.

As industry executives may recall, Facebook to be changed again itself as Meta in 2021, promising to usher in a new era of technology led by VR devices.

Among other things, the idea was to bet on Gen Z’s preference for socializing in online games like Fortnite and Roblox instead of traditional social media apps. The change also helped Meta to distance itself from the negativity surrounding its Facebook brand. Over the years, the brand has been marred by secret secrets like Cambridge Analytica; reports from a Facebook whistleblower Frances Haugenthose who shared documents showing Facebook was aware of its negative effects on children and young people; Congressional hearing on Facebook’s digital censorship; his role in spreading fake news; his independent practices, etc.

Meta’s vision at the time was that the metaverse would be the next big platform, where users connected to the real world through. Meta’s Horizon Worlds app and play games on their VR headset.

Fast forward, and the metaverse has been effectively abandoned in favor of AI.

According to CNBC, some of the injured including studios that create VR titles within Meta, like Armature Studio (“Resident Evil 4 VR“), Twisted Pixel (“Marvel’s Deadpool VR“), and Sanku (“Wrath of Asgard). Meanwhile, the VR fitness app Supernatural, which Meta got it in 2023 about $400 millionit will no longer produce new products and will go into “maintenance mode.” Camouflaj, the studio behind the “Batman: Arkham Shadow” VR game, has also been hit with layoffs, as reported. and GeekWire.

And last week, Seaside realized that Meta’s software for bringing VR to the workplace, Workrooms, it is closingalso.

This article follows an earlier Bloomberg report from December, which reported that Meta he was cutting budget of the real estate department up to 30%. Almost immediately, Meta announced that it was to stop his program to share its Meta Horizon operating system, which powers Quest-brand VR headsets, with third-party hardware manufacturers.

Unlike the news about the restoration of Meta, the cancellation of the company’s efforts should not be surprising – it is divisive. lost eating too much, to worry moneyand he had never made a profit.

All in all, the company made some $73 billion at Reality Labs. To understand this, you would have to spend $1 million a day for 200 years to match that amount.

“Open construction” fails

Also to be excessively and investors and analysts similarly, the first versions of the metaverse were just bad things. The stupid, soulless avatars didn’t even have legs, just one a fun selfie CEO of Meta Mark Zuckerberg it was so bad that it became a viral meme. In short, Meta was promising the future while its products had yet to deliver. It was a failure of the model of “open construction”, where the latest technology is sent to consumers in the hope of finding solutions that can be used for replication.

That model works when customers are interested in technology. But in the case of the metaverse, there were consumer interests in the middle. Although Meta quickly found a a large part of the VR market and its Oculus headset, the headset saw a drop in sales. Last spring, Counterpoint Research observed that global shipments of VR headsets fell by 12% annually in 2024, which was the third consecutive year of decline. Meta accounted for 77% of shipments in 2024.

Meta, betting on the “if you build it, they will come” method, was more interested in the benefits that can be made by running its platform of programs and games than the buyers or consumers who want these so-called facial computers.

In particular, Zuckerberg was looking for a way to bypass Apple and Google’s ability to monetize Meta through their app stores.

“This time … has been humbling, because as we are the leaders of the company, we have also learned what it is like to build other platforms. And following their rules has changed my opinion about technology,” Zuckerberg. he said in an important voice at the company’s Facebook Connect 2021 event, referring to the Apple-Google duopoly. “I believe that the lack of choice and high costs are holding back people from innovating, and holding back the entire Internet economy.”

He said the metaverse could grow to a billion people in the next decade, generating “hundreds of billions” of dollars in digital commerce. Professionals love it McKinsey & Co. and bank bank Citi backed up these dubious predictions with their lofty estimates of the metaverse becoming a multi-billion dollar platform by 2030.

Meta may have had dollar signs in its eyes, but software developed for the metaverse wasn’t being widely adopted, especially at Meta’s big company.

Although there is no external appearance Meta’s VR store, you can check the Meta apps with iOS and Android counterparts as a project based installation. According to an estimate made by an app intelligence provider Apptopiathe Meta Horizon app has been downloaded 60.4 million times worldwide and 39.8 million times in the US as of May 2018. The best official estimate, however, is its app functionality.

From the US group, Apptopia has the statistics of the average daily user share in the US, which grew from 3.49 in January 2023 to 4.93 in January 2026. Although this is still a high water mark for the application, it may not have been enough for Meta.

In comparison, outside of VR, Meta now has it more than 3.5 billion Daily users of its social networking apps Facebook, Instagram, WhatsApp, and Messenger.

Of course, if all this were to happen, Meta would have created a new empire, built on the back of VR gaming – not unlike the early days of Facebook as a social networking site. friends as Zynga – whose games included Farmville, and Words with Friends – ran it two currency streams about Facebook. (In the end, Facebook’s 30% cut of 30% of the product sales, combined with the restrictive policies on the platform, prompted Zynga to open its own gaming portal and pivot to mobile.)

But this time, Zuckerberg expressed his interest in getting software money soon. Meta could have a good image to attract developers to build VR if it promised to reduce the fees of Apple or Google by 30%, or other gaming platforms. Instead, Meta did the opposite: it paid more.

Even before VR became a major platform worth investing in, Meta announced its plans to do so an increase of 47.5% of digital sales within Horizon Worlds, with a 30% hardware fee and another 17.5% fee for Horizon Worlds itself. Producers, unsurprisingly, they were not happy.

Unfortunately, Meta was not creating a metaverse with user safety as a priority. As they rushed to expand the social network, the company was more proactive than concerned about security. For example, the company itself released his “Personal Boundary” episode.which puts a buffer between avatars, after reports that users were experiences sexual harassment in the metaverse. In some cases, users have participated being literally raped and gang rape in Meta’s Horizon Worlds. Trim then he dialed the security part a bit more by changing Personal Limits to default to “on” when a user is “unfriended” in the metaverse and allowing users to turn it off completely.

In May 2022, TechCrunch asked a Meta rep to explain in detail how to support Horizon Worlds. The company described several tools, including blocking and reporting, a “safe zone” button for users to block and block others immediately, and a feature to temporarily remove intruders from sites built in response to user feedback. Although he described these tools, Meta refused to say what could be done to combat the bad behavior they have.

At the time, users told TechCrunch that those who experienced abuse in the metaverse often took a more logical course of action: instead of filming the abuse, they removed their head and took a break from VR. But when they returned, the bully still appeared on their list of recent experiences, and it was too late to report the abuse with video and audio attached.

This does not seem to have been considered from the beginning, and detailed policies regarding abuse did not exist. When metaverse code of conduct was published later, it did not explain any results other than to say that Meta “will take action on users.”

Also at the time, Meta refused to share the structure of its metaverse construction team with TechCrunch. (But if we were to bet, we’d guess that there weren’t as many women on this project as men. show all Meta designsso it’s not a bad bet!)

AR, mixed reality, and AI became popular

Another nail in the coffin for the metaverse tradition was the success of Ray-Ban’s Meta AR sunglasses, which have caught the attention of consumers in recent months. I am Appearance such as art drawing hands freestream music, and interact with Meta AIglasses started selling traditional Ray-Bans in some retail stores in 2024. The company is now considering double the output of the glasses to meet consumer demand, Bloomberg said this week.

With an eye on AI, the company recently launched Ray-Ban Display last yearwhich are similar smart glasses that also have a display of apps, notifications, and directions on the right lens. The company has put on hold its global plans for this purchase, citing “unprecedented demand.” (Or rather, over-prediction.)

With other companies, including OpenAI, Amazon, and various startups, looking to hardware AI tools as the next computing platform, VR is seen as a remnant of an unfulfilled Internet vision.

In addition, these things, especially the introduction of AI as possible program platformit will make it difficult for Meta to continue to justify spending money on VR. Instead, Meta focuses on things that can, like Ray Ban and AI sunglasses, AI software growthand Major languages.