Zuckerberg's Metaverse, a $36 Billion Flop

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Mark Zuckerberg's confidence is such that the metaverse - and its corollary, Web 3 - are becoming the new darling of tech in 2022. Blinded by the past brilliance of the charismatic founder of Facebook, many large groups (particularly in the luxury sector like LVMH), consulting firms, and media outlets are promising the earth for the metaverse with spectacular investment announcements and enticing studies dangling billions of dollars in the air for the most daring. The "hype" is so crazy that the consulting firm McKinsey predicts, in a much-publicized study, up to $5 trillion in annual revenue for the metaverse in 2030, based on fanciful projections, while afghanistan mobile database and augmented reality applications were worth "only" $32 billion in 2021.

In reality, Mark Zuckerberg's gamble was mostly a smokescreen, a way to revive the company, which was going through a historic rough patch. Entangled in the Facebook Files revealed in September 2021—the most devastating scandal to date—scrutinized by regulators around the world for its advertising practices, and attacked head-on by Apple, which caused it to lose billions of dollars in advertising revenue with its new data protection policy, Mark Zuckerberg was facing stagnant revenue, eroding margins, and renewed market doubts about the future of targeted advertising.

Unfortunately for Mark Zuckerberg, his marketing muscle and visionary reputation were not enough: the metaverse bubble burst on its own in less than a year. " Metaverses are driven more by industry in a supply-driven way, much more than by the public in a demand-driven way ," noted members of the French government's exploratory mission in a report submitted last October .

Major strategic errors
Horizons Worlds, Meta's metaverse platform, was attracting only 200,000 monthly users by the end of 2022, according to the Wall Street Journal. Ridiculous, given the amounts invested and the company's expectations. And yet, in March 2023, a leak from an internal meeting at Meta revealed that only one in ten users would remain on the platform after a month . The problem is that Horizons Worlds is empty: the platform is supposed to be fueled by applications from its community, but usage is too low to spark enthusiasm among developers and brands, who use it more for marketing stunts than for long-term use. What's the point of organizing events in the metaverse if no one shows up?

"For a new technology to become widely used, it must meet a real public need or create a new need. This was the case with the smartphone, which changed everything because its existence simplified everyone's life. But the metaverse is not yet technologically advanced enough—many platforms resemble a Sega game from the 1990s—and does not yet offer enough disruptive uses to cause such a shock," analyzes Cyril Vart, Executive Vice President of Fabernovel.