In October 2021, Facebook CEO Mark Zuckerberg sent his trillion-dollar social media company into a new direction. Facebook changed its name to Meta, and Zuckerberg set his sights on a new horizon: the transformative horizon.
“There was a real need and desire at the time for Facebook to change its brand into something else,” said Liu Gebe, principal analyst and director at CCS Insight. “Facebook wanted to make it clear that it is more than just one social site.”
Although the term Metaverse predates Facebook, Zuckerberg's Metaverse ambitions have been present within the Meta since 2014, when Facebook bought virtual reality headset developer Oculus and launched Reality Labs. Seven years later, after the emergence of a global pandemic, global video game industry revenues exceeded $193 billion. Meta – and the Wall Street firm – saw an opportunity to capitalize on the growing number of Internet users, by capitalizing on the wave of virtual reality headsets.
“There was some sense in 2020 and into 2021 that this technology was ready, that it was finally going to be a big hit,” Gebby said. “We've seen a lot of false dawns in VR in the past.”
In December 2021, Horizon Worlds launched in the United States and marked Meta's entry into the open-world VR platform space. Meta had a short-term goal of reaching 500,000 monthly active users on Horizon Worlds by the end of the year. But its long-term goals were more ambitious. In June 2022, Zuckerberg told CNBC's Jim Cramer that he expects users to reach 1 billion by the end of the decade, doing “hundreds of dollars of e-commerce each.”
The company has a very long way to go.
An internal report published by the Wall Street Journal in 2022 found that Horizon Worlds had only about 200,000 monthly active users less than a year after launch. Now, three years later, the term metaverse has largely disappeared from public conversation, with Google Trends indicating a sharp decline in searches for the term after 2022.
To make matters worse, Reality Labs has been hemorrhaging cash, racking up $58 billion in operating losses since 2020.
Meta did not respond to CNBC's request for comment.
What happened to the metaverse? What exactly is the metaverse? Where is Meta today? Watch the video to learn more.
Correction: A previous version of this article incorrectly identified Meta's Ray-Ban partnership glasses as augmented reality glasses. The glasses are smart glasses, not augmented reality.
— CNBC's Jonathan Vanian contributed to this report.
