Meta has burned $45 billion in its four-year pursuit of the Metaverse dream.

Zuckerberg stated in the "Founder’s Letter" released in 2021: "The next platform will be more immersive - an internet experience where you are part of it, not just looking at it. We call it the Metaverse, and it will touch every product we develop."

Four years later, according to insiders at Meta, by early 2025, Meta's Metaverse project has become a financial black hole with cumulative losses reaching as high as $45 billion. This figure is almost equal to the combined market value of social media rivals Snap and Pinterest, and is close to the amount Elon Musk paid for Twitter. Worse still, Zuckerberg warned in last year's financial report that these losses would "increase significantly," but he did not specify what this specifically means.

Internal chaos, incompetent management, and unclear strategies are significant reasons for massive losses. Yahoo Finance summarized this after interviewing more than a dozen senior employees who previously worked at Reality Labs (Meta's Metaverse business unit). They (the employees) described the department as "chaotic and disorganized." Frequent changes in management and personnel adjustments have resulted in ongoing confusion, with many reassigned managers coming from other Meta business units but lacking expertise in augmented reality (AR) and virtual reality (VR).

The specific loss situation of Meta's Metaverse business, according to its financial data disclosure: in 2020, the loss exceeded 6 billion USD, in 2021 it was 10 billion, in 2022 it reached 13 billion, and in 2023 it even reached 16 billion USD. In just the first quarter of 2024, Reality Labs lost 3.8 billion USD, directly consuming the total revenue of this department from 2022 and 2023.

Such severe losses have raised concerns and doubts about what value the Metaverse really has and in what direction it will develop.

Looking at the development of the Metaverse, from the explosive popularity of the Metaverse in 2021 to its current relative calm, the development of the Metaverse shows a state of "a meteor streaking across the night sky." At the peak of its brilliance, only the domestic construction of the Metaverse and the relevant policy support were written into the medium- and long-term development plans of the country and most provinces and cities.

For example, in 2023, the Ministry of Industry and Information Technology and other five departments jointly issued the "Metaverse Industry Innovation Development Three-Year Action Plan (2023-2025)"; in 2022, Zhejiang Province released the "Zhejiang Province Metaverse Industry Development Action Plan (2023-2025)"; in 2022, Chengdu published the "Chengdu Cultivation of Metaverse Industry Action Plan (2022-2025 )"; in 2022, the Shanghai Municipal Economic and Information Commission revised and formed the "Shanghai Cultivation of 'Metaverse' New Track Action Plan (2022-2025)."

Although the Metaverse is facing losses and the attention the entire industry receives has greatly decreased compared to its peak period, the "Metaverse is an important platform for the interaction between the virtual world and the real society in the future," thus defining the importance and long-term value of the Metaverse, according to the Shanghai Municipal Science and Technology Commission.

1. The Metaverse reconstructs the digital experience as an "immersive entry point"

The immersive technologies that the Metaverse relies on encompass key capabilities such as AIGC, spatial computing, new display technologies, and multi-modal perceptual interaction, with the goal of lowering the threshold for virtual scene construction and enhancing content flexibility and realism. This means that users will no longer be "screen watchers," but rather "immersive participants"; content production and interaction will be highly intelligent and perceptual; the construction of the digital world will tend toward real-time, personalized, low-cost, and high-fidelity.

After the 2D flat world represented by mobile phones, it may be the 3D Metaverse that can be perceived and interacted with in real-time, and the Metaverse may be the next generation internet platform, forming the infrastructure for "immersive digital experiences."

2. The Metaverse creates a decentralized digital ecosystem's "value trust layer"

The Metaverse will also inevitably not be controlled by centralized giants, but will build decentralized/multi-centralized organizational rules and a trustworthy value network through the layout of Web3 and new types of blockchain systems, forming an automated collaboration mechanism based on smart contracts; personal ownership of data and assets; an open, neutral, and verifiable network operation model.

In particular, by building a Web3 network operating system and a scalable, secure, and controllable on-chain architecture, it lays the foundation for large-scale virtual economies and digital asset transactions. At that time, the Metaverse will carry a new type of digital economic order and serve as the underlying institutional foundation of a "trustworthy digital society."

Conclusion

Meta's Metaverse business is experiencing losses, which are also related to weak product sales and failure to gain mainstream market recognition. However, looking back at the development process of each generation of technology, it has never been smooth sailing. We have also seen that the subfield of the Metaverse, specifically the wearable AR/VR devices, has regained attention in the past two years, receiving considerable investment and market focus.

How to meet market demand and solve practical problems in the early stages of industry development determines whether the first step of the Metaverse is taken firmly.