The Metaverse: Facebook’s biggest bet yet
A couple of days ago we saw as Mark Zuckerberg announced that Facebook would be rebranding to Meta and introduced the world to some of the work their team had been doing to build a new digital experience platform. If you have been following Facebook for a while, this move shouldn’t of came as a surprise given how much Facebook had been investing in AR and VR technologies for the last couple of years. A couple of months ago if you watched Mark Zuckerberg’s interview with Marques Brownlee, his deep obsession with this technology became apparent.
I thought it would be interesting to talk about what led Facebook to pivoting, why they choose AR/VR as the next technology to focus on and ultimately what their vision for this new platform is.
What led Facebook to pivot?
For years now Facebook has had an uncontested monopoly in the social media space. From its dominate messaging services like WhatsApp and Messenger to its social media platforms like Instagram, they have been able to dictate the ability for the world to connect with each other. In 2021, although these platforms are definitely still mainstays, the cracks in the foundations are starting to show through.
The YoY growth of its user base has slowed down significantly since rapid digitization and, despite efforts to get more of the third world online, it is clear that the company this cannot be the guiding principle for the company anymore. Despite their best efforts to clone them, other social media platforms like TikTok have gained massive popularity particularily with Gen Z. These factors combined with the ongoing privacy scandals and leaks has forced Facebook’s hand to diversify. This new shift signifies that Facebook’s recognition of this and their plan to keep growing as a company.
Why focus on AR/VR Technologies?
While it makes sense that Facebook has transitioned into another field, some may be wondering why they specifically picked AR/VR Technologies as their next foray. I think if you look at some of the biggest challenges Facebook faces today and the opportunity that AR/VR presents, the answer becomes more clear.
AR and VR technologies represents the next generation of human computer interaction and is set to explode in the upcoming years. There is already an estimated 171M VR users worldwide and yet the market is set to grow to more than eight times its current size over the next 5 years. It is one of the biggest emerging platforms out there and has huge potential for companies in Silicon Valley.
Historically we see that Facebook has never had ownership of the platform they publish on. This, although a reality for many software giants, has plagued Facebook especially given how much they rely on user data to generate revenue. With Apple pushing their privacy agenda so hard, we have seen Facebook become limited in what it can do. Being the dominant platform for a certain technology puts you in a position of power to dictate other software on your terms. Facebook may have missed the ability to be this in the rise of smartphones but, with an investment in Oculus, have already positioned themselves as the main platform in this space.
With Apple, Amazon and Google working on their own offerings, doubling down on their commitment to the space gives them their best chance at securing a big portion of the market share. They want the metaverse to be dictated on their terms and no longer have to work within bounds set by other companies to grow their business.
Facebook’s Vision for the Platform
I think what is really interesting is how different Facebook’s vision for their platform is compared to other competiors. Where other companies seem more interested in developing digital integration to the natural world (usually in an AR sense), Facebook seems to be more interested in having its users fully submerged in a completely separated digital world dictated by their rules.
With features like Horizon Home, Fitness and Quest for Business, it is clear that Facebook is not building this technology to be an extension of your daily livelihood and rather wants you to spend a significant portion of your day in the Metaverse. Whether it be for work, entertainment or play they want to transport you into these different experiences without being constrained by the physical domains of the world.
It will be interesting to see how consumers react to this. I personally believe that consumers will be concerned with the psychological effects of constantly being in a digital world but perhaps they will add enough value to justify it to the end customer. It seems like everyday we are becoming more engrossed in the technology around us and perhaps this is the natural evolution of this.
The Metaverse is the boldest play Facebook has made since its inception. Banking on the upcoming growth of AR/VR and the longstanding relationship it has with these technologies, Facebook has decided that this is an opportunity worth going all in on. It is a major bet which will result in a major power shift in Silicon Valley, regardless of whether or not it pays off.
I would love to hear your thoughts on this rebranding and what you think the future holds for Meta!
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Thanks for reading,