The New York Times: Doubt, Confusion, Frustration, Zuckerberg's Struggle with the Metaverse

Original Title: 《Skepticism, Confusion, Frustration: Inside Mark Zuckerberg's Metaverse Struggles》

By: Ryan Mac, Sheera Frenkel, Kevin Roose

Translation: Old Yuppie

In October last year, when Facebook CEO Mark Zuckerberg announced that the company would be renamed Meta to become a "metaverse company," he painted a utopian vision of the future: billions of people would spend hours immersed in digital environments, working, socializing, and gaming in virtual and augmented worlds.

In the year that followed, Meta spent billions of dollars and assigned thousands of employees to realize Zuckerberg's dream. However, Meta's metaverse efforts have not gotten off to a smooth start.

The company's flagship virtual reality game, Horizon Worlds, still has bugs and is unpopular, leading Meta to implement a "quality lockdown" as it reconfigures the application for the remainder of the year.

Some Meta employees have complained that the company's strategy often changes, seemingly related to Zuckerberg's whims rather than a coherent plan.

Executives at Meta have argued over the company's metaverse strategy, with one senior leader expressing that the large sums of money spent on unproven projects made him "nauseous."

The New York Times interviewed a dozen current and former Meta employees and obtained internal communications that described the company's difficult journey in reshaping its business. These individuals requested anonymity because they were not authorized to discuss internal matters.

On Tuesday, Meta is expected to unveil a new virtual reality headset and other new metaverse features at a developer conference. This is crucial for the company as it struggles to pivot to make up for declines in other business areas. TikTok is siphoning young users away from Facebook and Instagram (Meta's two major revenue platforms), and Apple's privacy adjustments to its mobile operating system have cost Meta billions in advertising revenue.

The company's stock price has plummeted nearly 60% over the past year, reflecting not only broader market turmoil but also some investors' skepticism about whether the metaverse can yield substantial profits in the short term. In late September, the company announced a hiring freeze, and Zuckerberg warned employees that layoffs might be imminent.

Zuckerberg sought advice from investor and metaverse expert Matthew Ball, who said, "The pressure on Meta's business in 2022 is acute and significant, and it has nothing to do with the metaverse. There is also a risk that Mark's vision for the metaverse is almost entirely correct, just that the timeline is much further out than he imagines."

Meta spokesperson Andy Stone stated in a statement that the company believes it is still on the right path.

Stone said, "It's easy to be skeptical about new technologies and innovations. Actually building it is much harder—but that's what we're doing because we believe the metaverse is the future of computing."

Ten years ago, Zuckerberg successfully transformed his company to focus on how products operate on smartphones rather than desktops. He hinted at a similar shift last year, stating that investing in the metaverse would allow Meta to leap from one technological era to the next.

There are signs that Meta's bet is putting it ahead of competitors. Estimates suggest that the company's consumer virtual reality headset, Quest 2, is the most popular virtual reality headset on the market, with sales exceeding 15 million units. According to app analytics firm Sensor Tower, the company's Oculus virtual reality app (now rebranded as Meta Quest) has been installed over 21 million times on iOS and Android devices.

However, Meta's future success depends on the company's ability to bring virtual reality and augmented reality tools to more people.

In February, Meta stated that its Horizon Worlds had grown to about 300,000 monthly active users—an increase compared to a few months ago, but insignificant compared to Facebook's over 2.9 billion monthly active users. The company declined to provide more recent data on Horizon Worlds.

To make matters worse, U.S. regulators seem determined to prevent the company from achieving success through acquisitions of Instagram and WhatsApp. In July, the Federal Trade Commission sued Meta to block its acquisition of the popular virtual reality fitness app Inside. Meta is fighting the agency's lawsuit, claiming it is "factually and legally incorrect."

For years, Zuckerberg has been scrutinized for making unpopular political statements on Facebook, and he is determined to reshape his public image. He has positioned himself as the innovative face of the company's push into the metaverse, which has surprised some employees. Demonstrations and models of Meta's latest metaverse technology showcased Zuckerberg performing his hobbies in virtual reality, including fencing and a water sport similar to surfing—hydrofoiling. The CEO recently told popular comedian Joe Rogan on his podcast that building an immersive metaverse is his "holy grail."

His involvement has sometimes backfired. In August, Zuckerberg posted a screenshot of a virtual avatar from Horizon Worlds on his Facebook page, announcing that the app would expand to France and Spain. However, the flat, cartoonish appearance of the avatar was met with ridicule (with some comments comparing it to "the 2002 Nintendo GameCube release").

According to two employees, following this response, Zuckerberg and other executives instructed staff to prioritize improving the appearance of the avatars. Facebook spokesperson Stone said that Zuckerberg's reaction to the avatar issue was "frustrated," but did not provide further details.

The two employees said that a new version of Zuckerberg's digital avatar would soon be released, along with updates to other avatars in Horizon Worlds that are in production.

Four days after Zuckerberg's initial post, he shared his upgraded digital version, acknowledging that his first virtual avatar was "quite basic," while "the image features on Horizon are much more powerful." A graphic artist at Meta stated in a LinkedIn post (which has since been deleted) that he and his team designed about 40 versions of Zuckerberg's facial avatar over four weeks, with only the final version being approved.

Zuckerberg's enthusiasm for the metaverse has been questioned by some Meta employees. This year, he urged teams to hold meetings in Meta's Horizon Workrooms app, which allows users to gather in virtual meeting rooms. However, according to a knowledgeable source, many employees do not have virtual reality headsets or have not set them up, and they had to rush to purchase and register devices before their managers noticed.

An anonymous professional social network, Blind, conducted a survey of 1,000 Meta employees in May, revealing that only 58% understood the company's metaverse strategy. Employees also complained of high turnover rates and frequent personnel changes as Zuckerberg's focus shifted. Two employees said that within Meta, some staff now jokingly refer to key metaverse projects as M.M.H, which stands for "Make Mark Happy."

A post obtained by the Times showed that in September, Vishal Shah, the vice president in charge of Meta's metaverse division, expressed disappointment on an internal message board about the low number of Meta employees using Horizon Worlds.

In a post first reported by The Verge, Shah stated that management would begin tracking employee usage of Horizon Worlds and emphasized the importance of testing their own technology.

Shah asked, "A simple fact is, if we don't like it, how can we expect our users to like it?"

Shah declined to comment to the Times, but he also stated in the post that Horizon would undergo a "quality lockdown" for the remainder of the year to "improve the overall craftsmanship and fun of our products."

As Meta has been striving to develop its metaverse, some within the company have proposed unconventional ideas to attract new users. An internal post reviewed by the Times showed that three Meta employees suggested marketing virtual reality headsets to Americans who received student debt relief from the Biden administration, believing it could boost sales by 20%.

Analysis stated, "This is an opportunity for Meta Quest growth, as there is evidence that past federal stimulus policies have spurred growth." The company does not appear to have acted on this suggestion.

John Carmack is a well-known insider who opposes Zuckerberg's approach to the metaverse. He is a renowned game developer and was the chief technology officer of virtual reality company Oculus. Facebook acquired Oculus for about $2 billion in 2014. He continues to work part-time as a consultant at Meta.

In an August podcast interview, Carmack stated that the scale of Meta's bet on the metaverse—reporting a $10 billion loss in its virtual reality and augmented reality division last year—made him "nauseous just thinking about how much money was spent." He added that the bureaucracy of large companies and concerns about issues like diversity and privacy hindered Meta's progress in the metaverse.

Carmack also expressed his opinions on Meta's internal message board, Workplace. In a post obtained by the Times, Carmack, who spoke at the developer conference on Tuesday, criticized the functionality of the company's virtual reality headsets, stating that the need for software updates before using them "is extremely detrimental to the user experience."

Carmack's criticisms have put him at odds with executives like Meta's chief technology officer Andrew Bosworth. Bosworth has been responsible for the company's virtual reality efforts for years and is a close ally of Zuckerberg. According to four employees who have worked with Carmack, he urged the company to consider the metaverse primarily from the perspective of immediate user experience, while Bosworth viewed it from a longer-term perspective, focusing on business opportunities.

As pressure mounts, Zuckerberg has sent a clear message to Meta employees: either get on board or leave. In a meeting reported by Reuters in June, the 38-year-old billionaire pointed out that "there may be a group of people in the company who shouldn't be here," and according to a copy of comments shared by the Times, he would "double down" on expectations and goals. Since then, the company has frozen most hiring, cut budgets, and Zuckerberg has asked managers to begin identifying underperforming employees.

Faced with potential layoffs, some Meta employees have begun to express more enthusiasm for the metaverse. Several employees said that in recent months, more teams have been holding meetings within Horizon Workrooms.

However, this transition has not been smooth. According to an employee present, Bosworth attempted to host a staff meeting in Horizon Workrooms earlier this year.

The employee said that the meeting was hindered by technical issues, and the team ultimately resorted to using Zoom.